Notices. Interim regulations for online registration

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BILLING CODE 4910-15-P LIBRARY OF CONGRESS Copyright Office 37 CFR Part 202 [Docket No. RM 2007-7] Online Registration of Claims to Copyright AGENCY: Copyright Office, Library of Congress. ACTION: Interim regulations for online registration. SUMMARY: The Copyright Office is undergoing an extensive business process reengineering

(BPR)initiative of many of its internal work systems, including registration and recordation procedural systems, to enhance the delivery of its services to the public. The implementation of an online registration system is a key component of BPR, and it requires that the Office amend its regulations governing the procedures by which the public submits, and the Office processes, copyright registrations and recordations. These interim rules identify the principal changes and upgrades to the registration system and announce the amendments to the regulations to accommodate online registration. These changes will become effective with the commencement of the Beta test phase of the electronic, online registration system in July 2007. The Beta test phase will be limited to selected participants until system testing is complete, at which time the Office will open the electronic registration system to the public. DATES: These interim rules become effective on July 6, 2007. Written comments on the interim regulation should be received on or before September 4, 2007. ADDRESSES: If hand delivered by a private party, an original and five copies of a comment or reply comment should be brought to the Library of Congress, U.S. Copyright Office, Public and Information Office, 101 Independence Ave., SE., Washington, DC 20559, between 8:30 a.m. and 5 p.m. The envelope should be addressed as follows: Office of the General Counsel, U.S. Copyright Office. If delivered by a commercial courier, an original and five copies of a comment must be delivered to the Congressional Courier Acceptance Site

(CCAS)located at 2nd and D Streets, NE., Washington, DC between 8:30 a.m. and 4 p.m. The envelope should be addressed as follows: Office of the General Counsel, U.S. Copyright Office, LM-401, James Madison Building, 101 Independence Avenue, SE., Washington, DC. Please note that CCAS will not accept delivery by means of overnight delivery services such as Federal Express, United Parcel Service or DHL. If sent by mail (including overnight delivery using U.S. Postal Service Express Mail), an original and five copies of a comment or reply comment should be addressed to U.S. Copyright Office, Copyright GC/I&R, P.O. Box 70400, Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Tanya Sandros, General Counsel, or Nanette Petruzzelli, Special Legal Advisor to the Register for Reengineering, Copyright Office, Library of Congress, Washington, DC 20540. Telephone:

(202)707-8380. Telefax:

(202)707-8366. SUPPLEMENTARY INFORMATION: Background For well over a century, the Copyright Office has met its statutory obligation of registering claims to copyright and recording documents pertaining to copyright. 17 U.S.C. 207-210 (1909 Copyright Act, repealed 1976), *as amended* , 17 U.S.C. 205, 408-410 (2005). The Copyright Office’s internal processes for registering claims have been improved and upgraded periodically to take advantage of the emergence of new technologies for the purpose of greater efficiency in operating an office of record. The Office has issued, on average, more than a half-million certificates of registration each fiscal year for the past ten years. In fiscal year 2005, the Office received 600,535 claims to copyright for more than a million works of authorship of which it registered 531,720 claims. *See Annual Report of the Register of Copyrights, Fiscal Year Ending September 30, 2005* , at 9; also available on the Copyright Office website at www.copyright.gov. Approximately seven years ago, the Copyright Office decided that an extensive restructuring of its registration processing was in order to address the long processing times and mechanical problems with outdated office machinery that had come to characterize the registration system. The Office’s objectives in undertaking reengineering include the following: improve the efficiency and timeliness of public services; provide more Copyright Office services online; ensure the prompt availability of newly created copyright records; provide better internal tracking of items within all aspects of the Office’s workflow; and increase the acquisition of digital works for the Library of Congress. In addition to registration, reengineering’s scope will ultimately extend to all of the Office’s IT systems, mandatory deposit submissions under section 407 of the copyright law, the recordation of documents pertaining to copyrights, vessel hull designs, and mask works, and to administrative actions for cable, satellite and other compulsory licensing. These interim rules, however, lists and explains the changes applicable to the electronic copyright registration option and announces regulatory amendments to address the changes resulting from the adoption of electronic copyright registration procedures. These changes will apply to all participants submitting claims electronically, including those who take part in the Beta test. Those who do not participate in the Beta test will continue to submit paper applications under the current regulations. Other changes arising from the reengineered processes will be announced in the future in separate notices to the public. Beta testing of electronic registration system The Beta test phase of the online registration system component of the electronic Copyright Office (“eCO”) will begin in July 2007. The Office has chosen to implement its electronic registration procedures within a test environment initially in order to ensure the public seeking the benefits of online registration of the ease and functional accuracy of the new system and to allow the Copyright Office the necessary time to optimize all aspects of the new system. Participants in the Beta test will be selected based upon a set of criteria designed to identify participants with a wide variety of claims and accompanying deposit copy materials in all classes of authorship in order to determine whether the electronic system can effectively receive and process the electronic submissions. *See* 72 FR 30641 (June 1, 2007). The initial phase of the Beta test will cover basic registration claims for literary works, visual arts works, performing arts works and sound recordings submitted electronically. At a later date, additional participants will be added as the system shows its continuing reliability, and the Beta test will expand to cover all options for submitting applications and additional registration claim types, including group registrations, vessel hull designs, mask works, renewals, and corrections and amplifications of existing registrations. The Online Registration Process Registration consists, in part, of the statutorily mandated act of examining all works submitted for registration. 17 U.S.C. 410(a). The examination includes an Office determination of the copyrightability of the work as well as a determination that all other legal and formal requirements of the statute and regulations have been met with respect to all relevant facts surrounding a given work. While these statutory activities will not change, the Office is proposing major changes to the processes it employs to meet these requirements. Changes are being made to the registration application forms; deposit copy requirements for works submitted in an electronic format; the certificate of registration; the permanent registration record which the Office will maintain and make available; and the manner in which the Office will communicate with the public concerning registration submissions. These changes will be phased in over time after being fully tested. The Copyright Office has traditionally communicated with registration applicants by phone, letter, or email. Because of the change to electronic recordkeeping which the reengineered registration system represents, communication with applicants will occur more frequently by email because of the ease, the wide availability of the email medium, and the speed with which communication can be accomplished. Email, however, will not totally replace communication by letter or phone. Options for submitting claims after reengineering A registration application may be completed and submitted online or by mailing or delivering a completed application form, new Form CO, to the Copyright Office. Because the Office expects to accrue savings due to the more efficient processing of electronic claims, a lower filing fee of $35 has been established for online submissions. The fee for filing paper applications will remain $45. Four options will be available for registering claims in the reengineered Copyright Office. During the initial phase of the Beta test only registration by electronic submission (options #1 and 2) will be available. As the other options become available, they too will be offered to the participants in the Beta test; and once the Beta test is complete, the following four options will be made available to the public. 1. Registration may be made by electronic submission of the claim in its entirety. This means that the applicant electronically submits the application form via the Copyright Office website, www.copyright.gov, concurrently sends electronically the deposit materials, and pays the appropriate filing fee electronically, through an electronic fund transfer, with a credit card, or through a Copyright Office deposit account. This is full electronic submission and the filing fee is $35. 2. Registration may be made by electronically submitting the application form and the required filing fee, payment being made as described above, and mailing the required deposit materials in accordance with the filings requirements set forth in 37 CFR 202.20. The registration fee for this option is $35. 3. Registration may be made by completing a pdf version of the application, Form CO, available on the Office’s website, www.copyright.gov, and printing it out. The completed form includes a barcode containing the information that has been entered by the applicant and which will facilitate the Office’s handling of the claim. The completed application form accompanied by the appropriate deposit materials and the required $45 filing fee for a nonelectronic submission may be submitted to the Office by mail or hand delivered. Payment may be made by check, money order or Copyright Office deposit account. 4. Registration may be made by completing a blank application, Form CO, from the Office’s website, www.copyright.gov, or by requesting a blank registration form by phone, facsimile, email, US mail or by visiting the Public Information Office. This form is the same as the pdf version described above. The applicant may complete the form either by typing or printing the required information. The completed application form accompanied by the appropriate deposit materials and the required $45 filing fee for a nonelectronic submission may be submitted to the Office by mail or hand delivered. Payment may be made by check, money order or Copyright Office deposit account. Office staff will enter all applicant-supplied information into the automated registration system. Applications that are completed by hand or that are typed may take longer for processing because the Office staff must transfer the information into the automated registration system. Use of the US Postal Service to deliver claims After the electronic registration system is fully tested and released to the public, some applicants will continue to submit their claims through the mail. To assure that postal mail is routed correctly within the Copyright Office, applicants should use the appropriate 4-digit extension to the zip code and also indicate, by a two-letter abbreviation, the general subject matter of the claim. Those who submit a Form CA or Form Gatt should also include the appropriate two-letter code to identify the class of work. Claims should be addressed to the Office in the following manner: Library of Congress Copyright Office - xx (two-letter code) 101 Independence Avenue, S.E. Washington, D.C. 20559-6xxx (four-letter code) Class of work Two letter code 4-digit zip code extension literary works TX 6222 serials SE 6226 visual arts works VA 6211 performing artworks, * except motion pictures* PA 6233 sound recordings SR 6237 motion pictures MP 6238 renewal claims RE 6239 document recordations DOC 6216 mask works MW 6214 vessel hull designs VH 6215 Applicants are reminded that all mail addressed to Capitol Hill must be screened for security purposes. This required step significantly slows the traditional processing times for registration. This delay may be avoided by filing claims online. For information on walk-in business hours, security procedures, and other services of the Copyright Office Public Information Office, see the website at www.copyright.gov or phone the Office at 202-707-5959. Forms **A. Form CO** Form CO is the new generic application, appropriate for registration of a single work in any of the four classes of authorship (literary works, including single serial issues; works of the visual arts, including architectural works; works of the performing arts, including motion pictures and other audiovisual works; and sound recordings). It replaces the current registration application forms, Forms TX, VA, PA, SR, and SE, and it too will be made available on the Copyright Office website. Anyone wishing to register, for example, a book of poems, a computer program, a photograph, a map, or a sound recording and the song embodied within it, will use the generic registration form. Form CO will be available for all classes of authorship and registration will be made in the class of the predominant authorship which is the same principle the Office now follows. *See* 37 CFR 202.3(b)(1) and (b)(2). The Office will retain the registration class indicators TX (literary works), VA (visual arts), PA (performing arts), and SR (sound recordings) for this purpose and also as a means of separating records within the official registration database. Form CO is also the appropriate form for registering a single serial issue and multiple works considered to be a single unit under Office current regulations, *see* 37 CFR 202.3(b)(3). For purposes of registering these types of works, the paper application form contains a dedicated space for the title, and, if the work is a serial issue, the title of the serial will be placed there. The electronic form provides a similar field and also includes space for the volume/number/issue and, if there is one, the ISSN (International Standard Serial Number) for the serial of which one issue is being registered. Much of the required information on the new application form remains the same as the information required on the current forms. *See* 17 U.S.C. 409. However, the sequencing of the required information appearing in the new form differs from that on the current application forms; and there are several newly-appearing pieces of data on the generic application. Specifically, Form CO asks for the following additional but optional information: 1. International Standard Serial Number

(ISSN)information and the International Standard Book Number (ISBN), for monographic works; 2. Claimant email and telephone number; and 3. Rights and permission data. **B. Form CA** Form CA is an application for supplementary registration to correct or augment the information in an already completed registration. The additional information does not supersede the information contained in the earlier registration. 17 U.S.C. 408(d). The Office will continue to use Form CA. Supplementary registration within the reengineered Copyright Office may be accomplished either by filing electronically the application Form CA or by submitting a paper application Form CA. No changes have been made to the information required on the form. The Office has determined that the required fields in the current supplementary registration application are the appropriate fields. Thus, except for the format, Form CA will essentially remain the same. Form CA has been reformatted to make completion of the form more straightforward. **C. Continuation sheets** A continuation sheet is an adjunct to Form CO and serves as a form to provide additional information. *Continuation sheets, as such, will not exist in the online electronic form. The online system allows the entry of large quantities of continuous, applicant-supplied data within given electronic fields on the basic form, making the additional form unnecessary.* However, continuation sheets will still be used in conjunction with paper applications. The Office will offer two print continuation sheets - CON 1 and CON 2 - for Form CO when used for a single-work. CON 1 is the generic continuation sheet which can be used for the continuation of almost all information, except multiple titles. CON 1 is appropriate for listing additional authors, additional claimants, and additional information about the extent of the authorship being claimed. CON 2 must be used to list multiple titles which are to be covered by a single registration. When the reengineered registration system is released to the public later this year, there will be no additional fee for the listing of individual titles. Beginning in calendar year 2008, however, the Office expects to require an additional fee, $1 per title for electronic submission and $3 per title for paper submission, for listing individual titles in which a claim is made. Additionally, the Office expects to limit the number of titles permitted on a CON 2. A separate Notice of Proposed Rulemaking covering these topics will be published in order to gather public comment. Deposit copies and phonorecords **A. Best Edition considerations** Although the Copyright Office is changing its submission procedures for the registration of claims to copyright, at this time there is no change in the deposit requirements for published works. With respect to published works, the registration requirements for deposit copies and phonorecords existing in traditional print and physically tangible media will remain the same for all works, including those submitted electronically during the Beta test. Current deposit regulations, including those governing instances of identifying material, may be found at 37 CFR 202.20-202.21 and in Appendix B to those regulations, the Best Edition Statement. *See also* Copyright Office Circular 7B at www.copyright.gov. Registration of unpublished works may generally be made with any deposit materials which the applicant chooses, as long as the deposit shows the content/authorship on which copyright is being claimed. For works published in both hard copy as well as in electronic format, the Library’s Best Edition statement remains in effect as do the Copyright Office’s current regulations. Specifically, § 202.19(b)(1)(iii)(A) states that when the Office is aware that two or more editions of a work have been published, it will consult with the Library regarding the ‘best edition’ of the work which must be submitted under section 407 demand deposit requirements. The copyright law also provides that “[c]opies or phonorecords deposited for the Library of Congress under section 407 may be used to satisfy the deposit provisions (of section 408, registration deposit materials), if they are accompanied by the prescribed application and fee, and by any additional identifying material that the Register may, by regulation, require.” 17 U.S.C. 408(b)(4). With the general exception of the category of computer programs, satisfaction of section 407 demand requirements is tied to deposit materials used in the registration process. Generally, a hard copy format of a work for which registration is sought is the edition which the Library currently requires; that may change in the future. If the authorship in a multiple formatted work may be examined for registration using an electronic format, that format may, depending on the type of work and the collection goals of the Library, be submitted for registration purposes, but the obligation to deposit best edition hard copy format[s] may remain. *See generally* 17 U.S.C. 407; 37 CFR 202.19; Compendium of Copyright Office Practices II, § § 802-804. **B. Electronic file formats** The Copyright Office is currently concerned with structuring an automated system under its reengineering program that will be able to receive, maintain, and archive authorship in an electronic file when authorship embodied in that file is the subject of copyright registration. The Office realizes that no particular digital format is universally employed for this purpose and that a myriad of formats have evolved to accommodate the differing characteristics regarding the digitization of diverse content, e.g., photographs and sound recordings. Therefore, in order to structure a registration system which will facilitate the electronic registration of all works, the Office is identifying those digital formats which it anticipates it will be able to accommodate within its reengineered registration system. Applicants will not be required to use a particular digital format for the electronic submission of a work. Format is one of ease for the applicant and acceptable formats for registration purposes are listed merely as preferences. The following formats are acceptable and appear in no particular order: • .PDF Portable Document Format • .TXT Plain Text File • .WPD WordPerfect document • .DOC Word document • .TIF Tagged Image File Format • .JPG Joint Photographic Expert Group Format • .XML Extensible Markup Language • .MPEG Motion Picture Experts Group, name given in a general sense to a family of standards for the digital fixing of audiovisual information in compressed format; this family also includes: • .MP3 M-PEG 1 Audio Layer 3 • .WAV Waveform Audio Format • .HTML Hyper text markup language, markup language used to structure text and multimedia documents and to set up hypertext links. Executable files, i.e., those ending in .exe, .com, .bat, etc., will not be accepted. In cases where identifying material is required or allowed, that material may be submitted electronically, provided that all other requirements for submitting identifying material are met. A new regulation at 37 CFR 202.20(e) on electronic deposit formats required for registration will be added to the deposit regulation within the coming year, and the Office will seek comment on the proposed regulation at that time. As is the current practice, where the Office can accept an electronic submission and the content is encrypted or compressed, the Office will ask the applicant to provide software and/or algorithms to enable the required examination of the authorship content and to allow for the statutorily required public inspection pursuant to 17 U.S.C. 705(b) of such registered works. **C. Copyright Office use of digital deposit materials** Deposit materials submitted to the Copyright Office for purposes of registration are governed by the provisions of the copyright statute at sections 704 and 705 and the regulations governing the allowable extent of public inspection and copying of deposit materials found in the regulations for the Library and the Office’s current regulations. *See* 37 CFR 201.2(b). Certificates of registration Since 1978 the Copyright Office has issued certificates of registration which include a photocopy of the application form submitted by the applicant. The certificate reflects the application as it may have been amended, and as it was approved, by the copyright examiner. In the new registration system, the Office will issue certificates of registration containing information supplied by the applicant concerning the work being registered but which are not identical copies of the completed, examined, and approved application. These system-generated certificates will carry a certification which states that the party who signed the application certifies that the information provided is correct to the best of his knowledge. That party will have indicated that he falls within one of the categories of such signing party, *i.e* ., author, claimant, owner of exclusive rights, authorized agent of one of these parties, but the form does not require the party to indicate the particular status. This change addresses the frequent confusion on the part of applicants and the correspondence that such confusion has necessitated. The certifying date will automatically be added to the certificate, and it will be the date the Office electronically receives initially an acceptable application. The interim regulatory provisions amending 37 CFR 202.3(c) will govern use of Form CO. Parties submitting registration applications in the traditional paper format on or after July 2, 2007, and who are not part of the Beta test or the motion picture pilot, *see* 70 FR 3231 (January 21, 2005), will continue to receive certificates generated from a photocopied image of the originally submitted application. However, in the case where the Office processes a paper application electronically, certificates generated by the new system will be issued. The registration record Section 705(a) of the copyright law requires the Register to maintain records of “deposits, registrations, recordations, and other actions.” Section 705(b) requires that “such records and indexes as well as the articles deposited in connection with completed copyright registrations and retained under the control of the Copyright Office, shall be open to public inspection.” The purpose of the registration record is to create records that reflect the facts and information surrounding the copyright claim. As part of its reengineering efforts, the Copyright Office conducted a review and study of its registration records created through the years to determine how the registration records might be improved to provide an accurate summary of a claim to copyright in a particular work. The new registration record will contain the information which the applicant provides the Office and, in some cases, limited additional information taken from the deposit materials which the registration specialist determines to be necessary in order to further identify the work. The Office’s goal is to produce a permanent registration record, clear and unambiguous on its face, which readily reflects, and distinguishes between, facts supplied to the Office by the applicant and information, if any, taken from deposit materials. The first part of the record will contain only the copyright facts as supplied by the applicant. All information provided by the applicant on the application form will be taken verbatim. Any substantive editing of authorship and/or new matter statements and/or material excluded from claim statements, will be done only after contacting the applicant for permission to amend the information. The second part of the record will contain additional information taken from the deposit materials to assist the public in identifying the work. The registration records will also include for the first time the following additional information, where applicable, for the purpose of creating a more complete and useful record. • transfer statements of copyright from the author to another party; • the postal address of the claimant; • an indication of the specific authorship description for a work; and • specific information to indicate the type of material being excluded from the claim to copyright as well as the new material on which the claim is based. In addition, the following information will be included in the registration record, if provided: • the name, or title, and address of the person authorized to provide rights and permission to use the work, if authorized; • the email and/or phone number of the rights and permission party if authorized by the claimant; • the claimant’s email address and phone number, if authorized; and • a PREregistration 1 number where a preregistration has occurred prior to actual registration of a work. 1 Preregistration is a procedure administered by the Copyright Office which permits a ‘pre’ registration for a work that is being prepared for commercial distribution and has not been published. 17 U.S.C. 408(f)(1). Preregistration serves as a place-holder for limited purposes—specifically where a copyright owner wishes to facilitate the bringing of an infringement action while a work is still in the process of being prepared for commercial release. *See* Family Entertainment and Copyright Act, Pub. L. No. 109-9, 119 Stat. 218, signed into law April 27, 2005. The procedure is available only for certain categories of works which the Register has determined are eligible because of their prior infringement history. *See* information and regulations governing preregistration, 37 C.F.R. 202.16, at the Office’s website, www.copyright.gov/prereg. Some claims to registration which are not submitted as part of the Beta test will be processed for inclusion in the permanent Office records in the traditional manner. These registration records will reflect the current records structure. Other records of registrations, including some submitted in traditional print format and all those completed as part of the Beta test will, on the other hand, reflect the revised public record principles described above. Keyword searching. An important aspect of the new registration record will be the restructured search feature based on keywords. Keyword searches are those which utilize any interior word within a string of words or a phrase as opposed to using only the first, left-margin word of a name, title, or phrase. The new system will be able to locate a registration record using such interior words. Keyword searching will become available once the database has been switched from the COPICS system to the Voyager system. Inspection of records Completed registration records, including correspondence between the applicant and Office, will be available for inspection and copying, under the provisions of current Office regulations. *See* 37 CFR 201.2. Adoption of interim regulations Section 553(b)(3)(A) of the Administrative Procedure Act states that general notice of proposed rulemaking is not required for rules of agency organization, procedure, or practice. Since the Office finds that the following interim regulations are rules of agency organization, procedure, or practice, no notice of proposed rulemaking is required. Moreover, because it is necessary to have such a regulation in place immediately for purposes of the Beta test of the electronic registration system which is commencing concurrently with publication of these regulations, the Register of Copyrights finds that good cause exists for publication of these interim regulations less than 30 days before the effective date and without first seeking public comment. However, the Office is encouraging interested parties to comment on the interim regulations. All comments should be submitted no later than September 4, 2007. List of Subjects in 37 CFR Part 202 Claims, Copyright, Registration requirements. Interim Rule In consideration of the foregoing, the Copyright Office amends part 202 of 37 CFR, in the manner set forth below: PART 202 — REGISTRATION OF CLAIMS TO COPYRIGHT 1. The authority citation for part 202 continues to read as follows: Authority: 17 U.S.C. 702. 2. Section 202.3 is amended as follows: a. By redesignating the text of paragraph (b)(2) as (b)(2)(i); b. By adding paragraph (b)(2)(ii); c. By redesignating paragraphs (b)(3) through

(10)as (b)(4) through (11); d. By adding a paragraph (b)(3); and e. By revising paragraph (c)(2). The revisions and additions to § 202.3 read as follows: § 202.3 Registration of copyright.

(b)* * *

(2)* * *

(ii)For purposes of registration, the Register of Copyrights has prescribed a single form, Form CO, for registering a single work, in all subject matter, or for a single serial issue submitted on or after July 1, 2007. Form CO may be used in place of Form TX, Form PA, Form VA, Form SR, Form SE, and Form SE/Group. Form CO allows the applicant to assign a specific registration class of TX (for literary works, including single serial issues), PA (works of the performing arts, including motion pictures and audiovisual works), SR (sound recordings), or VA (works of the visual arts, including architectural works). Copies of the generic registration form will be available free upon request to the Public Information Office, Library of Congress, Copyright Office, 101 Independence Avenue, SE., Washington, DC 20559-6000. Application for registration using Form CO may be made in any of the following four ways:

(A)electronically, *i.e* ., the submission of an application form electronically at the Copyright Office website [www.copyright.gov], submission of deposit materials fixed in a digital format, and the required filing fee paid online through an electronic fund transfer, credit card, or through a Copyright Office deposit account; or

(B)partially electronically, i.e., the submission of an application form electronically at the Copyright Office website [www.copyright.gov], submission of deposit materials in physically tangible formats separately mailed to the Copyright Office, and the required filing fee paid online through an electronic fund transfer, credit card, or through a Copyright Office deposit account; or

(C)by completing a PDF version of the application available on the Office‘s website [www.copyright.gov], printing the completed form and mailing it in the same package with the required deposit copies and/or materials and appropriate filing fee in check, money order, or Copyright Office deposit account charge; or,

(D)in hard copy form with respect to all required elements, i.e., submission of a completed printed application form, physically tangible deposit copies and/or materials, and the required filing fee, all elements being placed in the same package and sent by mail or delivered to the Copyright Office.

(3)*Continuation sheets* . A continuation sheet, CON 1, is appropriate only in submissions for which a paper application is used and where additional space is needed by the applicant to provide all relevant information concerning a claim to copyright. A separate continuation sheet, CON 2, must be used to list contents titles, i.e., titles of independent works in which copyright is being claimed and which appear within a larger work or within a collection of works; examples are short stories within a published anthology or individual sound recording tracks appearing on a CD. An application may require use of both CON 1 and CON 2 sheets.

(c)* * *

(2)An application for copyright registration shall be submitted, electronically or in printed form, on the appropriate form prescribed by the Register of Copyrights under paragraph

(b)of this section. All completed application forms shall be accompanied by the appropriate filing fee, as required in § 201.3(c) of this chapter, and the deposit copies and materials required under 17 U.S.C. 408 and § 202.20. All applications submitted for registration shall supply the information required by the particular application and shall include a certification. The certification shall consist of:

(i)A designation that the party signing the print application, or submitting the application electronically, falls within an accepted status from among the following: author, claimant, an owner of exclusive rights, or a duly authorized agent of the author, claimant, owner of exclusive rights;

(ii)For print applications, the handwritten signature of the party described in paragraph (c)(2)(i) of this section accompanied by the typed or printed name of that party; or, if an electronically submitted application, a name provided within the certification screen of the electronic application which represents a party described in paragraph (c)(2)(i) of this section;

(iii)A declaration that information provided within the application is correct to the best of that party‘s knowledge; and,

(iv)For print applications, the date of completion of the application form, with the date (month, day, year) printed, typed, or handwritten; or, if an electronically submitted application, the date of electronic receipt of the application by the Copyright Office, which date shall be provided automatically by the Copyright Office. 4. Section 202.12 is amended by revising paragraphs (c)(1) and (c)(2) to read as follows: § 202.12 Restored copyrights.

(c)*Registration* .—(1) *General.* Application, deposit and filing fee for registration of a claim in a restored work under section 104A, as amended, may be submitted to the Copyright Office on or after January 1, 1996. The submission may be a completely electronic submission, with all required elements transmitted to the Office in electronic form; or, the submission may be partially electronic with the application form and fee submitted electronically and the deposit materials sent in physically tangible format(s). If all elements are submitted in physically tangible form, i.e., a completed, printed application form, physically tangible deposit copies/materials, and the appropriate filing fee in check, money order, or deposit account charge, all elements must be placed in the same package and sent to the following address: Library of Congress, Copyright Office, 101 Independence Avenue, SE., Washington, DC 20559-6000.

(2)*GATT form* . Application for registration for single works restored to copyright protection under URAA should be made on Form GATT. Form GATT may be submitted by completing Form GATT electronically, submitting the appropriate filing fee electronically, and sending the deposit copies and materials required by paragraph (c)(4) of this section by postal mail; or by printing Form GATT from the Office‘s website, sending it with the appropriate filing fee and deposit copies and materials required by paragraph (c)(4) of this section in the same package by mail; or by obtaining a Form GATT, completing it, and sending the appropriate filing fee and the deposit copies and materials required by paragraph (c)(4) of this section in the same package by mail. A printed Form GATT may be obtained by calling or writing the Copyright Office Hotline at 202-707-9100. The GATT deposit materials required by paragraph (c)(4) of this section may be submitted for examination and registration electronically. Where, however, the Library of Congress requests a particular work or its identifying material for its collections, the required print deposit materials must be submitted. 5. Section 202.20 is amended as follows: a. By revising paragraph (b)(1); b. By redesignating paragraphs (b)(2)(iii) through

(vi)as (b)(2)(iv) through (vii); and c. By adding a new paragraph (b)(2)(iii). The revisions and additions to § 202.20 read as follows: § 202.20 Deposit of copies and phonorecords for copyright registration.

(b)* * *

(1)*The best edition* of a work has the meaning set forth in § 202.19(b)(1). For purposes of this section, if a work is first published in both hard copy, i.e., in a physically tangible format, and also in an electronic format, the current Library of Congress Best Edition Statement requirements pertaining to the hard copy format apply.

(2)* * *

(iii)*Works submitted for registration in digital formats* . A ‘complete’ electronically filed work is one which is embodied in a digital file which contains:

(A)if the work is unpublished, all authorship elements for which registration is sought; and

(B)if the work is published solely in an electronic format, all elements constituting the work in its published form, i.e., the complete work as published, including metadata and authorship for which registration is not sought. Publication in an electronic only format requires submission of the digital file[s] in exact first-publication form and content.

(C)For works submitted electronically, any of the following file formats are acceptable for registration: PDF; TXT; WPD; DOC; TIF; SVG; JPG; XML; HTML; WAV; and MPEG family of formats, including MP3. This list of file formats is non-exhaustive and it may change, or be added to periodically. Changes will be noted in the list of acceptable formats on the Copyright Office website.

(D)Contact with the registration applicant may be necessary if the Copyright Office cannot access, view, or examine the content of any particular digital file that has been submitted for the registration of a work. For purposes of section 410(d) of 17 U.S.C., a deposit has not been received in the Copyright Office until a copy that can be reviewed by the Office is received. Dated: June 20, 2007 Marybeth Peters, Register of Copyrights. Approved by: James H. Billington, The Librarian of Congress. [FR Doc. E7-13194 Filed 7-5-07; 8:45 am] BILLING CODE 1410-30-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R03-OAR-2006-0840; FRL-8333-6] Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Redesignation of the Lancaster 8-Hour Ozone Nonattainment Area to Attainment and Approval of the Area's Maintenance Plan and 2002 Base-Year Inventory AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is approving a redesignation request and State Implementation Plan

(SIP)revisions submitted by the Commonwealth of Pennsylvania. The Pennsylvania Department of Environmental Protection (PADEP) is requesting that the Lancaster nonattainment area (“Lancaster Area” or “Area”) be redesignated as attainment for the 8-hour ozone national ambient air quality standard (NAAQS). In conjunction with its redesignation request, the PADEP submitted SIP revisions consisting of a maintenance plan for the Lancaster Area that provides for continued attainment of the 8-hour ozone NAAQS for at least 10 years after redesignation. EPA is approving the 8-hour maintenance plan. PADEP also submitted a 2002 base-year inventory for the Lancaster Area which EPA is approving. In addition, EPA is approving the adequacy determination for the motor vehicle emission budgets (MVEBs) that are identified in the Lancaster Area maintenance plan for purposes of transportation conformity, and is approving those MVEBs. EPA is approving the redesignation request, and the maintenance plan, and the 2002 base-year emissions inventory as revisions to the Pennsylvania SIP in accordance with the requirements of the Clean Air Act (CAA). DATES: *Effective Date:* This final rule is effective on July 6, 2007 pursuant to the authority of 5 U.S.C. 553(d)(1). ADDRESSES: EPA has established a docket for this action under Docket ID Number EPA-R03-OAR-2006-0840. All documents in the docket are listed in the *www.regulations.gov* Web site. Although listed in the electronic docket, some information is not publicly available, i.e., confidential business information

(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy for public inspection during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal are available at the Pennsylvania Department of Environmental Protection, Bureau of Air Quality Control, P.O. Box 8468, 400 Market Street, Harrisburg, Pennsylvania 17105. FOR FURTHER INFORMATION CONTACT: Ellen Wentworth

(215)814-2034, or by e-mail at *wentworth.ellen@epa.gov.* SUPPLEMENTARY INFORMATION: I. Background On May 15, 2007 (72 FR 27265), EPA published a notice of proposed rulemaking

(NPR)for the Commonwealth of Pennsylvania. The NPR proposed approval of Pennsylvania's redesignation request, a SIP revision that establishes a maintenance plan for the Lancaster Area that provides for continued attainment of the 8-hour ozone NAAQS for at least 10 years after redesignation, and a 2002 base-year emissions inventory. The formal SIP revisions were submitted by PADEP on September 20, 2006, and supplemented on November 8, 2006. Other specific requirements of Pennsylvania's redesignation request and SIP revision for the maintenance plan, and the rationale for EPA's proposed actions are explained in the NPR and will not be restated here. No public comments were received on the NPR. On December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit vacated EPA's Phase 1 Implementation Rule for the 8-hour Ozone Standard. (69 FR 23951, April 30, 2004). *South Coast Air Quality Management Dist.* v. *EPA,* 472 F.3d 882 (D.C.Cir. 2006). On June 8, 2007, in *South Coast Air Quality Management Dist.* v. *EPA,* Docket No. 04-1201, in response to several petitions for rehearing, the D.C. Circuit clarified that the Phase 1 Rule was vacated only with regard to those parts of the rule that had been successfully challenged. Therefore, the Phase 1 Rule provisions related to classifications for areas currently classified under subpart 2 of Title I, part D of the Act as 8-hour nonattainment areas, the 8-hour attainment dates, and the timing for emissions reductions needed for attainment of the 8-hour ozone NAAQS remain effective. The June 8 decision left intact the Court's rejection of EPA's reasons for implementing the 8-hour standard in certain nonattainment areas under subpart 1 in lieu of subpart 2. By limiting the vacatur, the Court let stand EPA's revocation of the 1-hour standard and those anti-backsliding provisions of the Phase 1 Rule that had not been successfully challenged. The June 8 decision reaffirmed the December 22, 2006 decision that EPA had improperly failed to retain four measures required for 1-hour nonattainment areas under the anti-backsliding provisions of the regulations:

(1)Nonattainment area nonattainment New Source Review

(NSR)requirements based on an area's 1-hour nonattainment classification;

(2)Section 185 penalty fees for 1-hour severe or extreme nonattainment areas;

(3)measures to be implemented pursuant to section 172(c)(9) or 182(c)(9) of the Act, on the contingency of an area not making reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain that NAAQS; and

(4)certain transportation conformity requirements for certain types of Federal actions. The June 8 decision clarified that the Court's reference to conformity requirements was limited to requiring the continued use of 1-hour motor vehicle emissions budgets until 8-hour budgets were available for 8-hour conformity determinations. For the reasons set forth in the proposal, EPA does not believe that the Court's rulings alter any requirements relevant to this redesignation action so as to preclude redesignation, and do not prevent EPA from finalizing this redesignation. EPA believes that the Court's December 22, 2006 and June 8, 2007 decisions impose no impediment to moving forward with the redesignation of this Area to attainment, because even in light of the Court's decisions, redesignation is appropriate under the relevant redesignation provisions of the Act and longstanding policies regarding redesignation requests. With respect to the 8-hour standard, the Lancaster Area is classified under subpart 2. The June 8, 2007 opinion clarifies that the Court did not vacate the Phase 1 Rule's provisions with respect to classifications for areas under subpart 2. The Court's decision therefore upholds EPA's classifications for those areas classified under subpart 2 for the 8-hour ozone standard. In its proposal, EPA proposed to find that the Area had satisfied the requirements under the 1-hour standard whether the 1-hour standard was deemed to be reinstated or whether the Court's decision on the petition for rehearing was modified to require something less than compliance with all applicable 1-hour requirements. Because EPA proposed to find that the Area satisfied the requirements under either scenario, EPA is proceeding to finalize the redesignation and to conclude that the Area met the requirements under the 1-hour standard applicable for purposes of redesignation under the 8-hour standard. These include the provisions of EPA's anti-backsliding rules, as well as the additional anti-backsliding provisions identified by the court in its rulings. In its June 8, 2007 decision the Court limited its vacatur so as to uphold those provisions of the anti-backsliding requirements that were not successfully challenged. Therefore, EPA finds that the Area has met the anti-backsliding requirements, see 40 CFR 51.900 *et seq.;* 70 FR 30592, 30604 (May 26, 2005), which apply by virtue of the Area's classification for the 1-hour ozone NAAQS, as well as the four additional anti-backsliding provisions identified by the Court, or alternatively, that such requirements are not applicable for purposes of redesignation. In addition, with respect to the requirement for transportation conformity under the 1-hour standard, the Court in its June 8 decision clarified that for those areas with 1-hour MVEBs, anti-backsliding requires only that those 1-hour budgets must be used for 8-hour conformity determinations until replaced by 8-hour budgets. To meet this requirement, conformity determinations in such areas must comply with the applicable requirements of EPA's conformity regulations at 40 CFR part 93. II. Final Action EPA is approving the Commonwealth of Pennsylvania's redesignation request, maintenance plan, and the 2002 base-year emissions inventory because the requirements for approval have been satisfied. EPA has evaluated Pennsylvania's redesignation request that was submitted on September 20, 2006, and determined that it meets the redesignation criteria set forth in section 107(d)(3)(E) of the CAA. EPA believes that the redesignation request and monitoring data demonstrate that the Lancaster Area has attained the 8-hour ozone standard. The final approval of this redesignation request will change the designation of the Lancaster Area from nonattainment to attainment for the 8-hour ozone standard. EPA is approving the maintenance plan for the Lancaster Area submitted on September 20, 2006 as a revision to the Pennsylvania SIP. EPA is also approving the MVEBs submitted by PADEP in conjunction with its redesignation request. In addition, EPA is approving the 2002 base-year emissions inventory submitted by PADEP on September 20, 2006, and supplemented on November 8, 2006 as a revision to the Pennsylvania SIP. In this final rulemaking, EPA is notifying the public that we have found that the MVEBs for NO X and VOCs in the Lancaster Area for the 8-hour ozone maintenance plan are adequate and approved for conformity purposes. As a result of our finding, the Lancaster Area must use the MVEBs from the submitted 8-hour ozone maintenance plan for future conformity determinations. The adequate and approved MVEBs are provided in the following table: Adequate and Approved Motor Vehicle Emissions Budgets in Tons Per Day

(tpd)Budget year NO X VOC 2009 22.3 14.3 2018 9.0 7.8 The Lancaster Area is subject to the CAA's requirements for marginal nonattainment areas until and unless it is redesignated to attainment. III. Statutory and Executive Order Reviews A. General Requirements Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal requirement, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). B. Submission to Congress and the Comptroller General The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . This rule is not a “major rule” as defined by 5 U.S.C. 804(2). C. Petitions for Judicial Review Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 4, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action, approving the redesignation of the Lancaster Area to attainment for the 8-hour ozone NAAQS, the associated maintenance plan, the 2002 base-year emissions inventory, and the MVEBs identified in the maintenance plan, may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements,Volatile organic compounds. 40 CFR Part 81 Air pollution control, National parks, Wilderness areas. Dated: June 25, 2007. Donald S. Welsh, Regional Administrator, Region III. 40 CFR part 52 is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart NN—Pennsylvania 2. In § 52.2020, the table in paragraph (e)(1) is amended by adding an entry for the 8-hour Ozone Maintenance Plan and the 2002 Base Year Emissions Inventory for the Lancaster, Pennsylvania Area at the end of the table to read as follows: § 52.2020 Identification of plan.

(e)* * *

(1)* * * Name of non-regulatory SIP revision Applicable geographic area State submittal date EPA approval date Additional explanation * * * * * * * 8-Hour Ozone Maintenance Plan and 2002 Base Year Emissions Inventory Lancaster Area (Lancaster County) 9/20/06, 11/08/06 7/06/07 [Insert page number where the document begins]. PART 81—[AMENDED] 3. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* 4. In § 81.339, the table entitled “Pennsylvania—Ozone (8-Hour Standard)” is amended by revising the entry for the Lancaster, PA Area to read as follows: § 81.339 Pennsylvania. Pennsylvania—Ozone [8-Hour Standard] Designated area Designation a Date 1 Type Category/classification Date 1 Type * * * * * * * Lancaster, PA: Lancaster County 07/06/07 Attainment. * * * * * * * a Includes Indian County located in each county or area, except otherwise noted. 1 This date is June 15, 2004, unless otherwise noted. [FR Doc. E7-12850 Filed 7-5-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 and 81 [EPA-R03-OAR-2006-0862; FRL-8333-7] Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Redesignation of the Tioga County Ozone Nonattainment Area to Attainment and Approval of the Area's Maintenance Plan and 2002 Base Year Inventory AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is approving a State Implementation Plan

(SIP)revision submitted by the Commonwealth of Pennsylvania. The Pennsylvania Department of Environmental Protection (PADEP) is requesting that the Tioga County ozone nonattainment area (Tioga Area) be redesignated as attainment for the 8-hour ozone ambient air quality standard (NAAQS). EPA is approving the ozone redesignation request for Tioga Area. In conjunction with its redesignation request, PADEP submitted a SIP revision consisting of a maintenance plan for Tioga Area that provides for continued attainment of the 8-hour ozone NAAQS for at least 10 years after redesignation. EPA is approving the 8-hour maintenance plan. PADEP also submitted a 2002 base year inventory for the Tioga Area which EPA is approving. In addition, EPA is approving the adequacy determination for the motor vehicle emission budgets (MVEBs) that are identified in the Tioga Area maintenance plan for purposes of transportation conformity, and is approving those MVEBs. EPA is approving the redesignation request, and the maintenance plan and the 2002 base year emissions inventory as revisions to the Pennsylvania SIP in accordance with the requirements of the Clean Air Act (CAA). DATES: *Effective Date:* This final rule is effective on July 6, 2007 pursuant to the authority of 5 U.S.C. 553(d)(1). ADDRESSES: EPA has established a docket for this action under Docket ID Number EPA-R03-OAR-2006-0862. All documents in the docket are listed in the *http://www.regulations.gov* Web site. Although listed in the electronic docket, some information is not publicly available, i.e., confidential business information

(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *http://www.regulations.gov* or in hard copy for public inspection during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal are available at the Pennsylvania Department of Environment Protection, Bureau of Air Quality Control, P.O. Box 8468, 400 Market Street, Harrisburg, Pennsylvania 17105. FOR FURTHER INFORMATION CONTACT: Rose Quinto,

(215)814-2182, or by e-mail at *quinto.rose@epa.gov.* SUPPLEMENTARY INFORMATION: I. Background On May 8, 2007 (72 FR 26046), EPA published a notice of proposed rulemaking

(NPR)for the Commonwealth of Pennsylvania. The NPR proposed approval of Pennsylvania's redesignation request, a SIP revision that establishes a maintenance plan for the Tioga Area that provides for continued attainment of the 8-hour ozone NAAQS for at least 10 years after redesignation, and a 2002 base year emissions inventory. The formal SIP revisions were submitted by PADEP on September 28, 2006 and supplemented on November 14, 2006. Other specific requirements of Pennsylvania's redesignation request SIP revision for the maintenance plan and the rationales for EPA's proposed actions are explained in the NPR and will not be restated here. No public comments were received on the NPR. However, on December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit vacated EPA's Phase 1 Implementation Rule for the 8-hour Ozone Standard. (69 FR 23591, April 30, 2004). *South Coast Air Quality Management Dist.* v. *EPA,* 472 F.3d 882 (D.C. Cir. 2006). On June 8, 2007, in *South Coast Air Quality Management Dist.* v. *EPA,* Docket No. 04-1201, in response to several petitions for rehearing, the DC Circuit clarified that the Phase 1 Rule was vacated only with regard to those parts of the rule that had been successfully challenged. Therefore, the Phase 1 Rule provisions related to classifications for areas currently classified under subpart 2 of Title I, part D of the Act as 8-hour nonattainment areas, the 8-hour attainment dates and the timing for emissions reductions needed for attainment of the 8-hour ozone NAAQS remain effective. The June 8 decision left intact the Court's rejection of EPA's reasons for implementing the 8-hour standard in certain nonattainment areas under subpart 1 in lieu of subpart 2. By limiting the vacatur, the Court let stand EPA's revocation of the 1-hour standard and those anti-backsliding provisions of the Phase 1 Rule that had not been successfully challenged. The June 8 decision reaffirmed the December 22, 2006 decision that EPA had improperly failed to retain four measures required for 1-hour nonattainment areas under the anti-backsliding provisions of the regulations:

(1)Nonattainment area New Source Review

(NSR)requirements based on an area's 1-hour nonattainment classification;

(2)Section 185 penalty fees for the 1-hour severe or extreme nonattainment areas;

(3)measures to be implemented pursuant to section 1729(c)(9) or 182(c)(9) of the Act, on the contingency of an area not taking reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain NAAQS; and

(tpd)Budget year NO X VOC 2009 3.4 2.2 2018 1.6 1.3 The Tioga Area is subject to the CAA's requirement for the basic nonattainment areas until and unless it is redesignated to attainment. III. Statutory and Executive Order Reviews A. General Requirements Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal requirement, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). B. Submission to Congress and the Comptroller General The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . This rule is not a “major rule” as defined by 5 U.S.C. 804(2). C. Petitions for Judicial Review Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 4, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action, approving the redesignation of the Tioga Area to attainment for the 8-hour ozone NAAQS, the associated maintenance plan, the 2002 base year emission inventory, and the MVEBs identified in the maintenance plan, may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. 40 CFR Part 81 Air pollution control, National parks, Wilderness areas. Dated: June 25, 2007. Donald S. Welsh, Regional Administrator, Region III. 40 CFR part 52 is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart NN—Pennsylvania 2. In § 52.2020, the table in paragraph (e)(1) is amended by adding an entry for the 8-hour Ozone Maintenance Plan and the 2002 Base Year Emissions Inventory for Tioga County, Pennsylvania at the end of the table to read as follows: § 52.2020 Identification of plan.

(e)* * * (1)* * * Name of non-regulatory SIP revision Applicable geographic area State submittal date EPA approval date Additional explanation * * * * * * * 8-Hour Ozone Maintenance Plan and 2002 Base Year Emissions Inventory Tioga County 09/28/06, 11/14/06 07/06/07 [Insert page number where the document begins]. PART 81—[AMENDED] 3. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* 4. In § 81.339, the table entitled “Pennsylvania—Ozone (8-Hour Standard)” is amended by revising the entry for the Tioga Co., PA, Tioga County to read as follows: § 81.339 Pennsylvania. Pennsylvania—Ozone [8-Hour Standard] Designated area Designation a Date 1 Type Category/classification Date 1 Type * * * * * * * Tioga Co., PA: Tioga County 07/06/07 Attainment. * * * * * * * a Includes Indian County located in each county or area, except otherwise noted. 1 This date is June 15, 2004, unless otherwise noted. [FR Doc. E7-12849 Filed 7-5-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY [EPA-R03-OAR-2006-0919; FRL-8335-1] 40 CFR Part 81 Approval and Promulgation of Air Quality Implementation Plans; Virginia; Redesignation of the Hampton Roads Nonattainment Area to Attainment and Approval of the Area's Maintenance Plan and 2002 Base-Year Inventory; Correction AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule; correcting amendment. SUMMARY: This document corrects an error in the rule language of a final rule pertaining to EPA's approval of the Hampton Roads Area maintenance plan and 2002 base-year inventory submitted by the Commonwealth of Virginia. DATES: *Effective Date:* July 6, 2007. FOR FURTHER INFORMATION CONTACT: Amy Caprio,

(215)814-2156 or by e-mail at *caprio.amy@epa.gov.* SUPPLEMENTARY INFORMATION: Throughout this document wherever “we” or “our” are used we mean EPA. On June 1, 2007, (72 FR 30490), we published a final rulemaking action announcing our approval of the Hampton Roads Area maintenance plan and 2002 base-year inventory. In that document, we inadvertently omitted Gloucester County on the list of Hampton Roads Cities and Counties in which the Mobile Vehicle Emission Budgets (MVEBs) are applicable. We also inadvertently omitted York County in the Virginia table for the 8-Hour ozone standard published at 40 CFR 81.347. The intent of the rule was to approve the maintenance plan and 2002 base-year inventory for the Hampton Roads Area. This action corrects the erroneous preamble language and rule. In rule document FRL-8320-9 published in the **Federal Register** on June 1, 2007 (72 FR 30490), on page 30490 in the third column, the revised rule language is corrected to read “As a result of our finding, the Cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg, and the Counties of Isle of Wight, James City, Gloucester, and York, Virginia must use the MVEBs from the submitted 8-hour ozone maintenance plan for future conformity determinations.” Section 553 of the Administrative Procedure Act, 5 U.S.C. 553(b)(B), provides that, when an agency for good cause finds that notice and public procedure are impracticable, unnecessary or contrary to the public interest, the agency may issue a rule without providing notice and an opportunity for public comment. We have determined that there is good cause for making today's rule final without prior proposal and opportunity for comment because we are merely correcting an incorrect citation in a previous action. Thus, notice and public procedure are unnecessary. We find that this constitutes good cause under 5 U.S.C. 553(b)(B). *Statutory and Executive Order Reviews:* Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)). Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedures Act or any other statute as indicated in the SUPPLEMENTARY INFORMATION section above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C 601 et seq.), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995

(UMRA)(Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of governments, as specified by Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard. This technical correction action does not involve technical standards; thus the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1998) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The Congressional Review Act (5 U.S.C. 801 et seq.), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement. 5 U.S.C. 808(2). As stated previously, EPA had made such a good cause finding, including the reasons therefore, and established an effective date of June 1, 2007. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . This correction to the MVEB applicability and the section 40 CFR 81.347 table for Virginia is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 81 Environmental protection, Air pollution control, National parks, Wilderness areas. Dated: June 25, 2007. Donald S. Welsh, Regional Administrator, Region III. 40 CFR part 81 is amended as follows: PART 81—[AMENDED] 1. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* 2. In § 81.347 the table entitled “Virginia—Ozone (8-Hour Standard)” is amended by revising the entry for the Norfolk-Virginia Beach-Newport News (Hampton Roads), VA Area to read as follows: § 81.347 Virginia. Virginia—Ozone (8-Hour Standard) Designated area Designation a Date 1 Type Category/classification Date 1 Type * * * * * * * Norfolk-Virginia Beach-Newport News (Hampton Roads), VA Area Chesapeake City June 1, 2007 Attainment. Gloucester County June 1, 2007 Attainment. Hampton City June 1, 2007 Attainment. Isle of Wight County June 1, 2007 Attainment. James City County June 1, 2007 Attainment. Newport News City June 1, 2007 Attainment. Norfolk City June 1, 2007 Attainment. Poquoson City June 1, 2007 Attainment. Portsmouth City June 1, 2007 Attainment. Suffolk City June 1, 2007 Attainment. Virginia Beach City June 1, 2007 Attainment. Williamsburg City June 1, 2007 Attainment. York County June 1, 2007 Attainment. * * * * * * * a Includes Indian country located in each county or area except otherwise noted. 1 This date is June 15, 2004, unless otherwise noted. [FR Doc. E7-12998 Filed 7-5-07; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 070316061-7124-02 ; I.D. 031907B] RIN 0648-AV13 Fisheries of the Exclusive Economic Zone Off Alaska; Groundfish Observer Program AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS issues a final rule to amend regulations supporting the North Pacific Groundfish Observer Program (Observer Program). This action is necessary to revise requirements for the facilitation of observer data transmission and improve inseason support for observers. This action would promote the goals and objectives of the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area and the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMPs). DATES: Effective on August 6, 2007. ADDRESSES: Copies of the final Regulatory Impact Review/Final Regulatory Flexibility Analysis (RIR/FRFA) prepared for this action may be obtained from the NMFS Alaska Region, P.O. Box 21668, Juneau, AK 99802, Attn: Ellen Sebastian, and on the NMFS Alaska Region website at *http://www.fakr.noaa.gov* . The proposed rule to revise requirements for the facilitation of observer data transmission and improve inseason support for observers may also be accessed at this website. FOR FURTHER INFORMATION CONTACT: Jason Anderson, 907-586-7228, or *jason.anderson@noaa.gov* . SUPPLEMENTARY INFORMATION: Background NMFS manages the U.S. groundfish fisheries of the Bering Sea and Aleutian Islands Management Area

(BSAI)and Gulf of Alaska

(GOA)in the Exclusive Economic Zone under the FMPs. The North Pacific Fishery Management Council (Council) has prepared the FMPs pursuant to the Magnuson-Stevens Fishery Conservation and Management Act. Regulations implementing the FMPs appear at 50 CFR part 679. General regulations that pertain to U.S. fisheries appear at subpart H of 50 CFR part 600. The Council originally adopted and NMFS approved and implemented the current “interim” Observer Program (Observer Program) in 1996 (61 FR 56425, November 1, 1996). Through interim extensions, Observer Program regulatory requirements have been extended through 2007 (62 FR 67755, December 30, 1997; 63 FR 69024, December 15, 1998; 65 FR 80381, December 21, 2000; and 67 FR 72595, December 6, 2002). A final rule that extended regulations implementing the Observer Program indefinitely was published on June 13, 2007 (72 FR 32559). The Observer Program provides the regulatory framework for the collection of data by observers to obtain information necessary for the conservation and management of the groundfish fisheries managed under the FMPs. Regulations implementing the Observer Program at § 679.50 require observer coverage aboard catcher vessels, catcher/processors, motherships, and shoreside and stationary floating processors that participate in the groundfish fisheries off Alaska, as well as establish vessel, processor, and observer provider responsibilities relating to the Observer Program. Timely electronic communication of catch reports submitted to NMFS by industry and observers is crucial for groundfish quota and prohibited species catch allowance monitoring. In July 1995, NMFS issued a final rule (60 FR 34904, July 5, 1995) that required computer hardware and software that enabled observers to send NMFS electronic data on all catcher/processors, motherships, and shoreside processors that process groundfish. In October 2003, a final rule was published (68 FR 58038, October 8, 2003) that extended these requirements to all catcher vessels that are required to carry an observer at all times during fishing operations. In April 2006, a final rule (71 FR 20346, April 20, 2006) was issued that, in part, revised hardware requirements to allow software upgrades installation. These rules referred to the electronic data submission and communications system as “Atlas.” Regulations describing hardware and software requirements for electronic submission of observer reports on all catcher/processors, motherships, catcher vessels required to carry an observer at all times, and from shoreside and stationary floating processors are found at § 679.50(g)(1) and (g)(2). This electronic data submission and communications system is now called the observer communications system (OCS), rather than “Atlas”. The OCS consists of computers and communications equipment supplied by catcher vessels, catcher/processors, motherships, and shoreside and stationary floating processors, as well as customized software provided to these entities by NMFS. The OCS lets observers rapidly process data they collect and report it to NMFS. Its use on catcher vessels, catcher/processors, motherships, and shoreside and stationary floating processors has enhanced timely and accurate fisheries data reporting. Regulations at § 679.50(g)(1) and (g)(2) require that each OCS computer's processing chip, memory, operating system, disk drive, and modem meet minimum specifications. Since their initial implementation, OCS requirements have been periodically revised. NMFS has required upgrades as commercially available software became obsolete or unsupported by its manufacturer, or when NMFS upgraded the OCS software component. Rather than continually specify hardware and software component that support new OCS software through rulemakings, this action removes the specific hardware and software component requirements. NMFS will now require that each catcher vessel, catcher/processor, mothership, and shoreside and stationary floating processor already subject to OCS requirements provide hardware and software that is fully functional and operational with the NMFS-supplied software. The term “functional” will mean that all the tasks and components of the NMFS supplied software and data transmissions to NMFS could be executed effectively by the computer equipment. NMFS will no longer revise OCS hardware and software requirements through rulemaking. As changes to the software component of the OCS become necessary to support electronic communications of observer data, Observer Program staff will communicate in writing with vessel and plant personnel to describe those changes. Catcher vessels, catcher/processors, motherships, and shoreside or stationary floating processors subject to OCS requirements are required to ensure that their computer hardware and software components continue to meet the functionality and operational requirements. Observer Program staff are currently upgrading the OCS software component. One reason for the upgrade is that the commercial database software used to store observer-collected information and interface with the OCS software is no longer supported by the manufacturer. The new OCS software should increase overall data quality by increasing the functionality and efficiency of the OCS, and interface with new, supported commercial database software. The new OCS software is expected to be available for installation for the 2008 fishing year. The new OCS software will be installed by NMFS field personnel on vessel and processor OCS computers. Under this regulatory action, catcher vessels, catcher/processors, motherships, and shoreside or stationary floating processors must ensure their OCS computer meets the minimum specifications necessary for the software to execute all of its tasks, including communication with NMFS computers to transmit data for the 2008 fishing year. Changes to OCS Regulations Presently, § 679.50(g)(1)(iii)(B)( *1* ) and (g)(2)(iii)(B)( *1* ) describe the minimum technical hardware and software standards for the OCS-use computer. This action removes the technical standards, but the OCS-use computer is still required to be connected to a communication device that provides a point-to-point modem connection to the NMFS host computer. This action implements regulations at § 679.50(g)(1)(iii)(B)( *2* ) and (g)(2)(iii)(B)( *2* ) that require catcher vessel, catcher/processor, mothership, and shoreside or stationary floating processor operators to install the most recent NMFS-provided OCS software version or other NMFS-approved, commercially available software. While no commercially available software has been approved at this time, NMFS will consider approving commercially available software in the future. This action revises the current OCS-computer operational standards. OCS hardware must be fully functional and operational under regulations at § 679.50(g)(1)(iii)(C) and (g)(2)(iii)(C). According to these regulations, “functional” means that the hardware can initiate and transmit data to NMFS. Under this action, “functional” will address software as well as hardware. “Functional” will now mean that all NMFS-supplied, or other approved software's tasks and components, must be fully functional and operational on the computer equipment. In addition to adding a software function standard, this action redesignates § 679.50(g)(1)(iii)(C) and (g)(2)(iii)(C) as § 679.50(g)(1)(iii)(B)( *3* ) and (g)(2)(iii)(B)( *3* ), respectively, to require that both software and hardware OCS components be functional. The revisions described above are necessary to accommodate the larger, more sophisticated software and database programs provided, or otherwise approved, by NMFS. The proposed rule to revise requirements for the facilitation of observer data transmission and improve inseason support for observers was published in the **Federal Register** on March 29, 2007 (72 FR 14764), and the public review and comment period closed on April 27, 2007. No comments were received during the comment period. Small Entity Compliance Guide Regulations governing observer coverage requirements for vessels and processors that participate in the groundfish fisheries off Alaska are found at 50 CFR part 679. A copy of these regulations are available on the internet at *http://www.fakr.noaa.gov/regs/summary.htm* . They also are available by mail. If you wish to receive a copy of these regulations by mail, call NMFS Alaska Region, Sustainable Fisheries Division at

(907)586-7228 or write to NMFS Alaska Region at the address listed in the ADDRESSES section of this final rule. These regulations identify which vessels and processors are required to have observers, when observers are required, and the related responsibilities of the vessel owner or operator and the manager of the processing plant. The requirements implemented in this final rule are one category of responsibilities for vessel operators and managers of shoreside processing plants or stationary floating processors that are required to have observers. All vessel operators and managers of shoreside processing plants or stationary floating processors that are required to have observers also are required to provide the observer with access to a computer that is connected to a communication device that provides a point-to-point connection to the NMFS host computer. The most recent release of NMFS data entry software provided by the Regional Administrator, or other approved software, must be installed on this computer. In addition, the required communication equipment that is available for use by the observers must be fully functional and operational. “Functional” means that all the tasks and components of the NMFS supplied, or other approved, software described at paragraph 50 CFR part 679(g)(1) and the data transmissions to NMFS can be executed effectively aboard the vessel by the communications equipment. Classification The Administrator, Alaska Region, NMFS, determined that the regulatory amendment is necessary for the conservation and management of the groundfish fisheries off Alaska and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable laws. This final rule has been determined to be not significant for purposes of Executive Order 12866. An Initial Regulatory Flexibility Analysis

(IRFA)was prepared for the proposed rule, and described in the Classification section of the preamble to the rule. The public comment period ended on March 23, 2007. No comments were received on the IRFA or the economic impact of the rule. NMFS prepared a FRFA which incorporates the IRFA and a summary of the analyses completed to support the action. A copy of this analysis is available from NMFS (see ADDRESSES ). A summary of the analysis follows. The need for and objectives of the rule are set forth in the preamble and are not repeated here. This action requires vessels and shoreside or stationary floating processors to meet current technology standards necessary to support OCS software changes as they occur. Entities subject to OCS requirements include all motherships, catcher/processors, shoreside or stationary floating processors, and catcher vessels required to carry an observer at all times. This action revises requirements for the facilitation of observer data transmission and improves support for observers. All motherships have gross revenues in excess of $4 million and are considered large entities. Data available for 2005 indicate that 17 of the 83 catcher/processors active in the groundfish fisheries that year are considered small entities. One catcher vessel is believed to meet the criterion for a small entity. NMFS staff estimate that three stationary or shoreside floating processors have fewer than 500 employees worldwide, and are considered small. Upgrade costs to accommodate anticipated changes to OCS software are estimated to average $93 for all catcher/processors, $200 for all motherships, $315 for all shoreside and stationary floating processors, and $438 for all catcher vessels required to carry an observer at all times under this action. For the 17 catcher/processors considered small entities, the cost is estimated at about 0.004 percent of one year's gross revenues. Due to confidentiality restrictions, NMFS is unable to report gross revenues for catcher vessels and shoreside or stationary floating processors considered small entities under this action. Therefore, OCS upgrade costs cannot be reported as a percentage of gross revenues for these entities. Alternative 1 described in the RIR/FRFA is the status quo alternative. Current regulations regarding computing and communications equipment would remain in effect. Alternative 2 would remove current hardware and software specifications for all vessels and shoreside or stationary floating processors currently subject to OCS requirements, and instead require them to ensure the computer provided for use by an observer meets the minimum specifications necessary for the NMFS-provided OCS software to execute all of its tasks, including communication with NMFS computers to transmit data. Alternative 3 would revise current regulations to upgrade minimum hardware and software specifications for all vessels and shoreside or stationary floating processors currently subject to OCS requirements. Future changes to OCS software that would require hardware and software upgrades would require additional rulemaking. Alternative 2 was selected as the preferred alternative because it removes the need for NMFS to continually revise regulations to specify hardware and software component upgrades that are needed to support evolving OCS software. Alternative 2 provides more flexible and responsive regulations than the current specific technical requirements that quickly become out of date. Alternative 1 was rejected because it does not meet the data quality and collection goals of the Observer Program. This is especially the case as more management programs are implemented that require near real-time data reporting for purposes of determining target and prohibited species catch quota harvests. Alternative 3 was rejected because, while it would meet short-term fishery dependent reporting goals, it does not meet the long-term goals of improving flexibility for NMFS staff to work directly with industry to ensure they meet the OCS requirements. Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. A small entity compliance guide is included in this final rule. No additional recordkeeping, reporting, or compliance requirements are associated with this action. List of Subjects in 50 CFR Part 679 Alaska, Fisheries, Reporting and recordkeeping requirements. Dated: June 29, 2007. Samuel D. Rauch III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 679 is amended as follows: PART 679—FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA 1. The authority citation for part 679 continues to read as follows: Authority: 16 U.S.C. 773 *et seq.* , 1801 *et seq.* , 3631 *et seq.* ; Pub. L. 108 199, 118 Stat. 110. 2. In § 679.50, paragraph (g)(1)(iii)(C) is redesignated as paragraph (g)(1)(iii)(B)( *3* ) and revised; paragraph (g)(2)(iii)(C) is redesignated as paragraph (g)(2)(iii)(B)( *3* ) and revised; and paragraphs (g)(1)(iii)(B)( *1* ) and ( *2* ), and (g)(2)(iii)(B)( *1* ) and ( *2* ) are revised to read as follows: § 679.50 Groundfish Observer Program.

(g)* * *

(1)* * *

(iii)* * *

(2)* * *

(iii)* * *

(B)* * * ( *1* ) *Observer access to computer* . Making a computer available for use by the observer. This computer must be connected to a communication device that provides a point-to-point connection to the NMFS host computer. ( *2* ) *NMFS-supplied software* . Ensuring that the shoreside or stationary floating processor specified in paragraph (g)(2) of this section has installed the most recent release of NMFS data entry software provided by the Regional Administrator, or other approved software. ( *3* ) *Functional and operational equipment* . Ensuring that the communication equipment required in paragraph (g)(2)(iii)(B) of this section and that is used by observers to enter and transmit data, is fully functional and operational. “Functional” means that all the tasks and components of the NMFS supplied, or other approved, software described at paragraph (g)(2)(iii)(B)( *2* ) of this section and the data transmissions to NMFS can be executed effectively aboard the vessel by the communications equipment. [FR Doc. E7-13133 Filed 7-5-07; 8:45 am] BILLING CODE 3510-22-S 72 129 Friday, July 6, 2007 Proposed Rules DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 981 [Docket No. AO-214-A7; AMS-FV-07-0050; FV07-981-1] Almonds Grown in California; Hearing on Proposed Amendment of Marketing Order No. 981 AGENCY: Agricultural Marketing Service, USDA. ACTION: Notice of hearing on proposed rulemaking. SUMMARY: Notice is hereby given of a public hearing to receive evidence on proposed amendments to Marketing Order No. 981 (order), which regulates the handling of almonds grown in California. Two amendments are proposed by the Almond Board of California (Board), which is responsible for local administration of the order. The proposed amendments would authorize establishment of container marking and labeling requirements and authorize establishment of different outgoing quality regulations for different markets. In addition, the Agricultural Marketing Service

(AMS)proposes to make any such changes as may be necessary to the order or its administrative rules and regulations to conform to any amendment that may result from the hearing. The proposals are intended to provide additional flexibility in administering the quality control provisions of the order and provide the industry with additional tools to aid in the marketing of almonds. DATES: The hearing date is: August 2, 2007, 9 a.m. to 5 p.m.; and continuing on August 3, 2007, at 9 a.m., if necessary, in Modesto, California. ADDRESSES: The hearing location is: Stanislaus County Farm Bureau, 1201 L Street, Modesto, California 95353. FOR FURTHER INFORMATION CONTACT: Martin Engeler, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, Suite 102-B, Fresno, California 93721; Telephone:

(559)487-5110, Fax:

(559)487-5906, or E-mail: *Martin.Engeler@usda.gov;* or Kathleen M. Finn, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 0237, Washington, DC 20250-0237; Telephone:

(202)720-2491, Fax:

(202)720-8938, or E-mail: *Kathy.Finn@usda.gov.* Small businesses may request information on this proceeding by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 0237, Washington, DC 20250-0237; Telephone:

(202)720-2491, Fax:

(202)720-8938, or E-mail: *Jay.Guerber@usda.gov.* SUPPLEMENTARY INFORMATION: This administrative action is instituted pursuant to the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” This action is governed by the provisions of sections 556 and 557 of title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Order 12866. The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) seeks to ensure that within the statutory authority of a program, the regulatory and informational requirements are tailored to the size and nature of small businesses. Interested persons are invited to present evidence at the hearing on the possible regulatory and informational impacts of the proposals on small businesses. The amendments proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have retroactive effect. If adopted, the proposed amendments would not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with the proposals. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review the USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. The hearing is called pursuant to the provisions of the Act and the applicable rules of practice and procedure governing the formulation of marketing agreements and orders (7 CFR part 900). The proposed amendments were recommended by the Board and submitted to USDA on March 12, 2007. After reviewing the proposals and other information submitted by the Board, USDA made a determination to schedule this matter for hearing. The proposed amendments to the order recommended by the Board are summarized as follows: 1. Amend the order by adding a new § 981.43 to authorize establishment of container marking or labeling requirements. 2. Amend the order by revising § 981.42(b) of the order to authorize establishment of different outgoing quality requirements for different markets. The Board works with USDA in administering the order. These proposals submitted by the Board have not received the approval of USDA. The Board believes that the proposed changes would provide additional flexibility in administering the quality control provisions of the order, and would enable the Board to establish regulations that would address current and future industry needs for appropriate container markings and quality standards. The proposed amendments are intended to aid in the marketing of almonds and improve the operation and administration of the order. In addition to the proposed amendments to the order, AMS proposes to make any such changes as may be necessary to the order or its administrative rules and regulations to conform to any amendment that may result from the hearing. The public hearing is held for the purpose of:

(i)Receiving evidence about the economic and marketing conditions which relate to the proposed amendments of the order;

(ii)determining whether there is a need for the proposed amendments to the order; and

(iii)determining whether the proposed amendments or appropriate modifications thereof will tend to effectuate the declared policy of the Act. Testimony is invited at the hearing on all the proposals and recommendations contained in this notice, as well as any appropriate modifications or alternatives. All persons wishing to submit written material as evidence at the hearing should be prepared to submit four copies of such material at the hearing and should have prepared testimony available for presentation at the hearing. From the time the notice of hearing is issued and until the issuance of a final decision in this proceeding, USDA employees involved in the decisional process are prohibited from discussing the merits of the hearing issues on an *ex parte* basis with any person having an interest in the proceeding. The prohibition applies to employees in the following organizational units: Office of the Secretary of Agriculture; Office of the Administrator, AMS; Office of the General Counsel, except any designated employee of the General Counsel assigned to represent the Board in this proceeding; and the Fruit and Vegetable Programs, AMS. Procedural matters are not subject to the above prohibition and may be discussed at any time. List of Subjects in 7 CFR Part 981 Almonds, Marketing agreements, Nuts, Reporting and recordkeeping requirements. PART 981—ALMONDS GROWN IN CALIFORNIA 1. The authority citation for 7 CFR part 981 continues to read as follows: Authority: 7 U.S.C. 601-674. 2. Testimony is invited on the following proposals or appropriate alternatives or modifications to such proposals. Proposals submitted by the Almond Board of California: Proposal Number 1 3. Add § 981.43 to read as follows: § 981.43 Marking or labeling of containers. The Board may, with the approval of the Secretary, recommend regulations to require handlers to mark or label the containers that are used in packaging or handling almonds. Container means a box, bin, bag, carton, or any other type of receptacle used in the packaging or handling of almonds. Proposal Number 2 4. Revise § 981.42 by adding a new sentence at the end of paragraph

(b)to read as follows: § 981.42 Quality control.

(b)* * * The Board may, with the approval of the Secretary, recommend different outgoing quality requirements for different markets. Proposal submitted by USDA: Proposal Number 3 Make such changes as may be necessary to the order or its administrative rules and regulations to conform with any amendment that may result from the hearing. Dated: June 29, 2007. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E7-13073 Filed 7-5-07; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28382; Directorate Identifier 2006-NM-179-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 727 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for all Boeing Model 727 airplanes. This proposed AD would require revising the FAA-approved maintenance program by incorporating new airworthiness limitations

(AWLs)for fuel tank systems to satisfy Special Federal Aviation Regulation No. 88 requirements. This proposed AD would also require the initial inspection of a certain repetitive AWL inspection to phase in that inspection, and repair if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by August 20, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*

(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6505; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28382; Directorate Identifier 2006-NM-179-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone

(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (67 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design (i.e., type certificate

(TC)and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with another latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this proposed AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Relevant Service Information We have reviewed the following sections of Boeing 727-100/200 Airworthiness Limitations (AWLs), D6-8766-AWL, original release, dated March 2006 (hereafter referred to as “Document D6-8766-AWL”), for Model 727, 727C, 727-100, 727-100C, 727-200, and 727-200F series airplanes: • Section A, “SCOPE” • Section B, “FUEL SYSTEMS AIRWORTHINESS LIMITATIONS” • Section C, “SYSTEM AWL PAGE FORMAT” • Section D, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS” Those sections of Document D6-8766-AWL describe new AWLs for fuel tank systems. The new AWLs include: • AWL inspections, which are periodic inspections of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCLs), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require the FAA-approved maintenance program by incorporating the information in Sections A, B, C, and D of Document D6-8766-AWL. This proposed AD would also require the initial inspection of a certain repetitive AWL inspection to phase in that inspection, and repair if necessary. Difference Between Proposed AD and Service Bulletin In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended in the service bulletin. Rework Required When Implementing AWLs Into an Existing Fleet The maintenance program revision for the fuel tank systems specified in paragraph

(g)of this proposed AD, which involves incorporating the information specified in Document D6-8766-AWL, would affect how operators maintain their airplanes. After doing that maintenance program revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before the maintenance program revision specified in paragraph

(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual

(CMM)applies to fuel pumps repaired after the maintenance programs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date the maintenance program revision specified in paragraph

(g)is done, except as provided by paragraph

(h)of this proposed AD. This proposed AD would require only the maintenance program revision specified in paragraph (g), and initial inspections specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph

(g)of this proposed AD would require revising the FAA-approved maintenance program by incorporating certain information specified in Document D6-8766-AWL. Paragraph

(g)allows accomplishing the maintenance program revision in accordance with later revisions of the Document D6-8766-AWL as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Paragraph

(h)allows accomplishing the initial inspection and repair in accordance with later revisions of Document D6-8766-AWL as an acceptable method of compliance if they are approved by the Manager, Seattle ACO. In addition, Section B of Document D6-8766-AWL specifies that any deviations from the published AWL instructions, including AWL intervals, must be approved by the Manager, Seattle ACO. Therefore, after the maintenance program revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector

(PMI)or Principal Avionics Inspector

(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions Section B of Document D6-8766-AWL has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in Section B without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in Document D6-8766-AWL, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix 1 of this proposed AD contains a list of Air Transport Association

(ATA)sections for the revised maintenance manuals. Operators might wish to use the appendix as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. Some of the AWLs contained in Section D of Document D6-8766-AWL are inspections for which the applicable sections of the operating rules apply. Other AWLs are CDCCLs, which are tied to conditional maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in Section D of Document D6-8766-AWL refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referring to the CMMs by revision level in the applicable AWL for certain components rather than including information directly in Document D6-8766-AWL because of the volume of that information. As a result, the Manager, Seattle ACO, must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval

(PMA)approved parts), methods, techniques, and practices not contained in the CMMs need to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, pump repair/overhaul manuals must be approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in Section D of Document D6-8766-AWL, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks may be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 530 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Parts Cost per airplane Number of U.S.- registered airplanes Fleet cost Maintenance program revision 8 None $640 272 $174,080 Inspection 8 None 640 272 174,080 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in subtitle VII, part A, subpart III, section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28382; Directorate Identifier 2006-NM-179-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by August 20, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to all Boeing Model 727, 727C, 727-100, 727-100C, 727-200, and 727-200F series airplanes, certificated in any category. Note 1: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations in the Boeing 727-100/200 Airworthiness Limitations (AWLs), D6-8766-AWL, according to paragraph

(g)or

(i)of this AD, as applicable. Unsafe Condition

(d)This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information Reference

(f)The term “Document D6-8766-AWL” as used in this AD, means Boeing 727-100/200 Airworthiness Limitations (AWLs), D6-8766-AWL, original release, dated March 2006. Maintenance Program Revision

(g)Before December 16, 2008, revise the FAA-approved maintenance program to incorporate the information in the sections specified in paragraphs (g)(1), (g)(2), (g)(3), and (g)(4) of this AD; except that the initial inspection required by paragraph

(h)of this AD must be done at the applicable compliance time specified in that paragraph. Accomplishing the revision in accordance with a later revision of Document D6-8766-AWL is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA.

(1)Section A, “SCOPE” of Document D6-8766-AWL.

(2)Section B, “FUEL SYSTEMS AIRWORTHINESS LIMITATIONS,” of Document D6-8766-AWL.

(3)Section C, “SYSTEM AWL PAGE FORMAT,” of Document D6-8766-AWL.

(4)Section D, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS,” of Document D6-8766-AWL. Initial Inspection and Repair if Necessary

(h)At the later of the compliance times specified in paragraphs (h)(1) and (h)(2) of this AD, do a detailed inspection of the wire bundles routed over the center fuel tank for damaged clamps, wire chafing, and wire bundles in contact with the surface of the center fuel tank, in accordance with AWL Number 28-AWL-01 of Section D of Document D6-8766-AWL. If any discrepancy is found during the inspection, repair the discrepancy before further flight in accordance with AWL Number 28-AWL-01 of Section D of Document D6-8766-AWL. Accomplishing the actions required by this paragraph in accordance with a later revision of Document D6-8766-AWL is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO. Note 2: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.”

(1)Prior to the accumulation of 36,000 total flight hours, or within 120 months since the date of issuance of the original standard airworthiness certification or the date of issuance of the original export certificate of airworthiness, whichever ever occurs first.

(2)Within 72 months after the effective date of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Appendix 1.—Implementing Fuel Tank System Airworthiness Limitations on Model 727, 727C, 727-100, 727-100C, 727-200, 727-200F Series Airplanes AWL No. ALI/CDCCL ATA section or CMM document Task title 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Tank No. 2 Inspection. 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-03 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-04 CDCCL CMM 28-41-01, Revision 12; CMM 28-41-02, Revision 5; CMM 28-41-03, Revision 3; CMM 28-41-06, Revision 8; CMM 28-41-07, Revision 17; CMM 28-41-08, Revision 9; CMM 28-41-09, Revision 8; CMM 28-41-23, Revision 10; or subsequent revisions 28-AWL-05 CDCCL CMM 28-40-03, Revision 5; CMM 28-41-06, Revision 8; or subsequent revisions 28-AWL-06 CDCCL SWPM 20-14-12 Repair of Fuel Quantity Indicator System

(FQIS)Wire Harness. AMM 28-41-21/401 Remove/Install Fuel Tank Bulkhead

(Spar)Receptacle Wire Harness. 28-AWL-07 CDCCL AMM 29-11-53/401 Install System A Hydraulic Fluid Heat Exchanger. AMM 29-12-61/401 Install System B Hydraulic Fluid Heat Exchanger. 28-AWL-08 CDCCL 28-AWL-09 CDCCL CMM 28-20-1, Revision 7; CMM 28-20-5, Revision 6; CMM 28-20-06, Revision 6; or subsequent revisions 28-AWL-10 CDCCL AMM 28-22-21/401 Install Fuel Boost Pump. 28-AWL-11 CDCCL AMM 28-21-93/401 Remove the Auxiliary Tank Fueling Float Switch. AMM 28-21-93/401 Install the Auxiliary Tank Fueling Float Switch. 28-AWL-12 CDCCL AMM 28-11-21/401 Removal/Installation Cast Fuel Tank Access Panels. 28-AWL-13 CDCCL AMM 28-11-21/401 Removal/Installation Machined Fuel Tank Access Panels. AMM 28-13-11/401 Install the Relief Valve. 28-AWL-14 CDCCL AMM 28-22-21/601 Fuel Boost Pump—Inspection/Check. 28-AWL-15 CDCCL AMM 28-22-00/101 Engine Fuel Feed System—Trouble Shooting. Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-13115 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28436; Directorate Identifier 2007-CE-055-AD] RIN 2120-AA64 Airworthiness Directives; Pacific Aerospace Limited Model 750XL Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

(AD)for the products listed above. This proposed AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: To prevent cracks developing in the aileron spar adjacent to the inboard hinge attachment * * * The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by August 6, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*

(202)493-2251. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* . Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone

(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Karl Schletzbaum, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4146; fax:

(816)329-4090. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-28436; Directorate Identifier 2007-CE-055-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion The Civil Aviation Authority of New Zealand, which is the aviation authority for New Zealand, has issued DCA/750XL/13, effective date April, 26, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: To prevent cracks developing in the aileron spar adjacent to the inboard hinge attachment accomplish the following: Remove both ailerons, inspect and modify the aileron spar at the inboard hinge attachment point in accordance with Pacific Aerospace Ltd Service Bulletin PACSB/XL/027. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Pacific Aerospace Limited has issued Mandatory Service Bulletin PACSB/XL/027, dated March 27, 2007. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of the Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This Proposed AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 7 products of U.S. registry. We also estimate that it would take about 6 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $80 per work-hour. Required parts would cost about $864 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $9,408, or $1,344 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **Pacific Aerospace Limited:** Docket No. FAA-2007-28436; Directorate Identifier 2007-CE-055-AD. Comments Due Date

(a)We must receive comments by August 6, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to 750XL airplanes, serial numbers 101, 102, 104 through 120, and 122 through 129, certificated in any category. Subject

(d)Air Transport Association of America

(ATA)Code 27: Flight Controls. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: To prevent cracks developing in the aileron spar adjacent to the inboard hinge attachment accomplish the following: Remove both ailerons, inspect and modify the aileron spar at the inboard hinge attachment point in accordance with Pacific Aerospace Ltd Service Bulletin PACSB/XL/027. Actions and Compliance

(f)Unless already done, within the next 6 months after the effective date of this AD or 150 hours time-in-service

(TIS)after the effective date of this AD, whichever occurs first, rework the left and right ailerons in accordance with Pacific Aerospace Ltd drawing number 11-03141/42, drawn March 26, 2007, as specified in Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/027, dated March 27, 2007. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows: No differences. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Staff, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Karl Schletzbaum, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4146; fax:

(816)329-4090. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Refer to MCAI Civil Aviation Authority of New Zealand AD DCA/750XL/13, effective date April 26, 2007; Pacific Aerospace Limited Mandatory Service Bulletin PACSB/XL/027, dated March 27, 2007; and Pacific Aerospace Ltd drawing number 11-03141/42, drawn March 26, 2007, for related information. Issued in Kansas City, Missouri, on June 29, 2007. Kim Smith, Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-13092 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28383; Directorate Identifier 2006-NM-180-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-100, -200, -200C, -300, -400, and -500 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for all Boeing Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. This proposed AD would require revising the FAA-approved maintenance program to incorporate new airworthiness limitations

(425)917-6505; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28383; Directorate Identifier 2006-NM-180-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone

(AWLs)and Certification Maintenance Requirements (CMRs), D6-38278-CMR, Revision May 2006 (hereafter referred to as “Revision May 2006 of Document D6-38278-CMR”). Section C of Revision May 2006 of Document D6-38278-CMR describes new AWLs for fuel tank systems. The new AWLs include: • AWL inspections, which are periodic inspections of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCLs), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require revising the FAA-approved maintenance program to incorporate the information in Section C of Revision May 2006 of Document D6-38278-CMR. This proposed AD would also require the initial inspection of a certain repetitive AWL inspection to phase in that inspection, and repair if necessary. Explanation of Compliance Time In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended by Boeing. Rework Required When Implementing AWLs Into an Existing Fleet The maintenance program revision for the fuel tank systems specified in paragraph

(g)of this proposed AD, which involves incorporating the information specified in Revision May 2006 of Document D6-38278-CMR, would affect how operators maintain their airplanes. After doing that maintenance program revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before the maintenance program revision specified in paragraph

(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual

(CMM)applies to fuel pumps repaired after the maintenance programs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date that the maintenance program revision specified in paragraph

(g)is done, except as provided by paragraph

(h)of this proposed AD. This proposed AD would require only the maintenance program revision specified in paragraph

(g)and the initial inspection specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph

(g)of this proposed AD would require revising the FAA-approved maintenance program by incorporating certain information specified in Revision May 2006 of Document D6-38278-CMR. Paragraph

(g)allows accomplishing the maintenance program revision in accordance with later revisions of Document D6-38278-CMR as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Paragraph

(h)allows accomplishing the initial inspection and repair in accordance with later revisions of Document D6-38278-CMR as an acceptable method of compliance if they are approved by the Manager, Seattle ACO. In addition, Section C of Revision March 2006 of Document D6-38278-CMR specifies that any deviations from the published AWL instructions, including AWL intervals, must be approved by the Manager, Seattle ACO. Therefore, after the maintenance program revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector

(PMI)or Principal Avionics Inspector

(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions Section C of Revision March 2006 of Document D6-38278-CMR has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in Section C without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in Section C, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix 1 of this proposed AD contains a list of Air Transport Association

(ATA)sections for the revised maintenance manuals for Model 737-100, -200, and -200C series airplanes. Appendix 2 of this proposed AD contains a list of ATA sections for the revised maintenance manuals for Model 737-300, -400, and -500 series airplanes. Operators might wish to use the appendices as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. Some of the AWLs contained in Section C of Revision March 2006 of Document D6-38278-CMR are inspections for which the applicable sections of the operating rules apply. Other AWLs are CDCCLs, which are tied to conditional maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in Section C of Revision March 2006 of Document D6-38278-CMR refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referring to the CMMs by revision level in the applicable AWL for certain components rather than including information directly in the AWL because of the volume of that information. As a result, the Manager, Seattle ACO, must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval

(PMA)approved parts), methods, techniques, and practices not contained in the CMMs need to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, certain pump repair/overhaul manuals must be approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in Section C of Revision March 2006 of Document D6-38278-CMR, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks may be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 2,337 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Parts Cost per airplane Number of U.S.- registered airplanes Fleet cost Maintenance program revision 8 None $640 672 $430,080 Inspection 8 None 640 672 430,080 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28383; Directorate Identifier 2006-NM-180-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by August 20, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to all Boeing Model 737-100, -200, -200C, -300, -400, and -500 series airplanes, certificated in any category. Note 1: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations in the Boeing 737-100/200/200C/300/400/500 Airworthiness Limitations

(AWLs)and Certification Maintenance Requirements (CMRs), D6-38278-CMR, according to paragraph

(g)or

(i)of this AD, as applicable. Unsafe Condition

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information Reference

(f)The term “Revision May 2006 of Document D6-38278-CMR” as used in this AD, means Boeing 737-100/200/200C/300/400/500 AWLs and CMRs, D6-38278-CMR, Revision May 2006. Maintenance Program Revision

(g)Before December 16, 2008, revise the FAA-approved maintenance program to incorporate the information in Section C of Revision May 2006 of Document D6-38278-CMR; except that the initial inspection required by paragraph

(h)of this AD must be done at the applicable compliance time specified in that paragraph. Accomplishing the revision in accordance with a later revision of Document D6-38278-CMR is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Initial Inspection and Repair if Necessary

(h)At the later of the compliance times specified in paragraphs (h)(1) and (h)(2) of this AD, do a special detailed inspection of the lightning shield to ground termination on the out-of-tank fuel quantity indication system

(FQIS)wiring to verify functional integrity, in accordance with AWL Number 28-AWL-03 of Section C of Revision May 2006 of Document D6-38278-CMR. If any discrepancy is found during the inspection, repair the discrepancy before further flight in accordance with AWL Number 28-AWL-03 of Section C of Revision May 2006 of Document D6-38278-CMR. Accomplishing the actions required by this paragraph in accordance with a later revision of Document D6-38278-CMR is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO. Note 2: For the purposes of this AD, a special detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. The examination is likely to make extensive use of specialized inspection techniques and/or equipment. Intricate cleaning and substantial access or disassembly procedure may be required.”

(2)Within 24 months after the effective date of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle Aircraft Certification Office, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Appendix 1.—Implementing Fuel Tank System Airworthiness Limitations on Model 737-100, -200, and -200C Series Airplanes AWL No. ALI/CDCCL ATA section or CMM document Task title 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Center Tank Inspection. 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-03 ALI AMM 20-55-54/601 FQIS Connectors—Inspection/Check. 28-AWL-04 CDCCL SWPM 20-10-15 Assembly of Shield Ground Wires. 28-AWL-05 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-06 CDCCL CMM 28-41-11, Revision 12; CMM 28-41-13, Revision 11; CMM 28-41-23, Revision 10; or subsequent revisions 28-AWL-07 CDCCL CMM 28-40-25, Revision L; CMM 28-41-05, Revision 11; CMM 28-40-58, Revision 4; or subsequent revisions 28-AWL-08 CDCCL AMM 28-41-101/401 Remove/Install Fuel Tank Bulkhead

(Spar)Receptacle Wire Harness. 28-AWL-09 CDCCL AMM 29-11-53/401 Install System A Hydraulic Fluid Heat Exchanger. 28-AWL-10 CDCCL AMM 28-22-142/401 Install the Bulkhead Fitting. 28-AWL-11 CDCCL 28-AWL-12 CDCCL CMM 28-20-37, Revision 10; CMM 28-20-1, Revision 7; CMM 28-20-5, Revision 6; CMM 28-20-07, Revision 1; or subsequent revisions 28-AWL-13 CDCCL AMM 28-22-41/401 Install the Boost Pump. 28-AWL-14 CDCCL AMM 28-21-71/401 Float Switch Installation. 28-AWL-15 CDCCL AMM 28-11-13/401 Install Center Tank Access Panel. 28-AWL-16 CDCCL AMM 28-11-11/401 Removal/Installation of Access Panels 1 Thru 13. 28-AWL-17 CDCCL AMM 28-11-11/401 Removal/Installation of Access Panels No. 14. AMM 28-13-31/401 Install Flame Arrestor. 28-AWL-18 CDCCL AMM 28-22-41/601 Fuel Boost Pump Wiring and Conduit—Inspection/Check. 28-AWL-19 CDCCL AMM 28-22-00/101 Troubleshoot the Fuel Feed System 28-AWL-20 CDCCL Appendix 2.—Implementing Fuel Tank System Airworthiness Limitations on Model 737-300, -400, and -500 Series Airplanes AWL No. ALI/CDCCL ATA section or CMM document Task title Task No. 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Center Tank Inspection 28-11-00-206-281 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration 28-AWL-03 ALI AMM 20-55-54/601 FQIS Connectors—Inspection/Check 20-55-54-286-001 28-AWL-04 CDCCL SWPM 20-10-15 Assembly of Shield Ground Wires 28-AWL-05 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration AMM 28-41-72/401 Isolated Fuel Quantity Transmitter

(IFQT)Installation 28-41-72-404-018 28-AWL-06 CDCCL 28-AWL-07 CDCCL CMM 28-40-25, Revision L; CMM 28-41-05, Revision 11; CMM 28-40-58, Revision 4; or subsequent revisions 28-AWL-08 CDCCL SWPM 20-14-12 Repair of Fuel Quantity Indicator System

(FQIS)Wire Harness AMM 28-41-44/401 Wire Bundle Replacement 28-41-44-404-001 28-AWL-09 CDCCL AMM 29-15-04/401 Heat Exchanger Installation 29-15-04-294-048 28-AWL-10 CDCCL AMM 28-22-15/401 Engine Fuel Feed Tube Bulkhead Fitting Installation 28-22-15-404-044 28-AWL-11 CDCCL 28-AWL-12 CDCCL CMM 28-20-07, Revision 10; CMM 28-20-1, Revision 7; CMM 28-20-5, Revision 6; CMM 28-20-07, Revision 1; or subsequent revisions 28-AWL-13 CDCCL AMM 28-22-41/401 Fuel Boost Pump Installation 28-22-41-404-019 28-AWL-14 CDCCL AMM 28-21-71/401 AIRPLANES WITH TYPE I FLOAT SWITCH; Float Switch Installation 28-22-71-404-013 AIRPLANES WITH TYPE II FLOAT SWITCH; Float Switch Installation 28-22-71-424-093 28-AWL-15 CDCCL AMM 28-11-31/401 Center Tank Access Panel Installation 28-11-31-404-008 28-AWL-16 CDCCL AMM 28-11-11/401 Access Panels No. 1 thru 13 Installation 28-11-11-404-002 28-AWL-17 CDCCL AMM 28-13-41/401 Pressure Relief Valve Installation 28-13-41-404-010 Access Panel No. 14 Installation 28-11-11-404-004 AMM 28-13-31/401 Flame Arrester Installation 28-13-31-404-007, or 28-13-31-404-032 28-AWL-18 CDCCL AMM 28-22-00/601 Fuel Boost Pump Wiring in Conduit, No. 1 Tank Inspection 28-22-00-216-033 Fuel Boost Pump Wiring in Conduit, No. 1 Tank Inspection 28-22-00-216-044 28-AWL-19 CDCCL AMM 28-22-00/101 Engine Fuel Feed System—Trouble Shooting Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-13107 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28434; Directorate Identifier 2007-CE-053-AD] RIN 2120-AA64 Airworthiness Directives; Hawker Beechcraft Corporation (Type Certificates No. 3A15 and No. 3A16 Previously Held by Raytheon Aircraft Company) F33 Series and Models G33, V35B, A36, A36TC, B36TC, 95-B55, D55, E55, A56TC, 58, and G58 Airplanes and Raytheon Aircraft Company Models 58P, 58TC, and 77 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

(AD)for certain Hawker Beechcraft Corporation F33 Series and Models G33, V35B, A36, A36TC, B36TC, 95-B55, D55, E55, A56TC, 58, and G58 airplanes and Raytheon Aircraft Company Models 58P, 58TC, and 77 airplanes. This proposed AD would require you to replace certain circuit breaker toggle switches with improved design circuit breaker toggle switches. This proposed AD results from reports of certain circuit breaker toggle switches used in various electrical systems throughout the affected airplanes overheating. We are proposing this AD to prevent failure of the circuit breaker toggle switch, which could result in smoke in the cockpit and the inability to turn off the switch. DATES: We must receive comments on this proposed AD by September 4, 2007. ADDRESSES: Use one of the following addresses to comment on this proposed AD: • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*

(202)493-2251. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. For service information identified in this proposed AD, contact Hawker Beechcraft Corporation, 9709 East Central, Wichita, Kansas 67291; telephone:

(800)429-5372 or

(316)676-3140. FOR FURTHER INFORMATION CONTACT: Jose Flores, Aviation Safety Engineer, Wichita Aircraft Certification Office, 1801 Airport Road, Room 100, Wichita, Kansas 67209; telephone:

(316)946-4132; fax:

(316)946-4107. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments regarding this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number, “FAA-2007-28434; Directorate Identifier 2007-CE-053-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive concerning this proposed AD. Discussion We have received reports of circuit breaker toggle switch failure on certain Hawker Beechcraft Corporation F33 Series and Models G33, V35B, A36, A36TC, B36TC, 95-B55, D55, E55, A56TC, 58, and G58 airplanes and Raytheon Aircraft Company Models 58P, 58TC, and 77 airplanes. These circuit breaker toggle switches are used in various electrical systems throughout the airplanes, which include but are not limited to anti-ice systems (PITOT, WSHLD, PROP), landing lights, strobe lights, taxi lights, and the rotating beacon. Analysis of the affected circuit breaker toggle switches, part numbers (P/Ns) 35-380132-1 through 35-380132-53, shows that a copper braid inside the switch frays with use causing an internal short. The short causes the circuit breaker toggle switch to overheat producing smoke and a burning smell in the cockpit either from internal switch components melting or from external wiring melting because it is no longer protected by the breaker. The manufacturer has developed a circuit breaker toggle switch with improved internal isolation, P/N 35-380132-61 through 35-380132-113. This condition, if not corrected, could result in failure of circuit breaker toggle switch. This failure could result in smoke in the cockpit and the inability to turn off the switch. Relevant Service Information We have reviewed Hawker Beechcraft Recommended Service Bulletin SB 24-3807, Issued: May, 2007 and Raytheon Aircraft Company Recommended Service Bulletin SB 24-3735, Issued: August, 2005. The service information describes procedures for replacing circuit breaker toggle switches, P/Ns 35-380132-1 through 35-380132-53, with parts of improved design, P/Ns 35-380132-61 through 35-380132-113. FAA's Determination and Requirements of the Proposed AD We are proposing this AD because we evaluated all information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design. This proposed AD would require you to replace certain circuit breaker toggle switches with improved design circuit breaker toggle switches. Costs of Compliance We estimate that this proposed AD would affect 10,821 airplanes in the U.S. registry. We estimate the following costs to do the proposed replacement: Labor cost Parts cost Total cost per circuit breaker toggle switch Total cost on U.S. operators 1 work-hour × $80 per hour = $80 per circuit breaker toggle switch $105 per circuit breaker toggle switch $185 for each circuit breaker toggle switch. Each airplane typically has more than 1 circuit breaker toggle switch installed. Some airplanes may have up to 15 From $2,001,885 to replace one circuit breaker toggle switch per affected airplane up to $30,028,275 to replace 15 circuit breaker toggle switches per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. Examining the AD Docket You may examine the AD docket that contains the proposed AD, the regulatory evaluation, any comments received, and other information on the Internet at *http://dms.dot.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone

(800)647-5527) is located at the street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **Hawker Beechcraft Corporation (Type Certificates No. 3A15 and No. 3A16 previously held by Raytheon Aircraft Company) and Raytheon Aircraft Company:** Docket No. FAA-2007-28434; Directorate Identifier 2007-CE-053-AD. Comments Due Date

(a)We must receive comments on this airworthiness directive

(AD)action by September 4, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to the following airplane models and serial numbers that have a part number (P/N) 35-380132-1 through 35-380132-53 circuit breaker toggle switch installed and are certificated in any category: Models Serial Nos.

(1)F33 and G33 CD-1235 through CD-1304.

(2)F33A CE-290 through CE-1791.

(3)F33C CJ-26 through CJ-179.

(4)V35B D-9069 through D-10403.

(5)A36 E-185 through E-3629 and E-3631 through E-3635.

(6)A36TC and B36TC EA-1 through EA-695.

(7)95-B55 TC-1913, TC-1936 through TC-2456.

(8)D55 TE-452 through TE-767.

(9)E55 TE-768 through TE-1201.

(10)A56TC TG-84 through TG-94.

(11)58 TH-1 through TH-2124.

(12)58P TJ-3 through TJ-497.

(13)58TC TK-1 through TK-151.

(14)G58 TH-2126, TH-2127, TH-2131 through TH-2134, TH-2136, TH-2137, TH-2139 through TH-2141, and TH-2143 through TH-2150.

(15)77 WA-1 through WA-312. Unsafe Condition

(d)This AD results from reports of certain circuit breaker toggle switches used in various electrical systems through the affected airplanes overheating. We are proposing this AD to prevent failure of the circuit breaker toggle switch, which could result in smoke in the cockpit and the inability to turn off the switch. Compliance

(e)To address this problem, you must do the following, unless already done: Actions Compliance Procedures

(1)Replace all affected circuit breaker toggle switches specified in paragraph

(c)of this AD with an improved circuit breaker toggle switch, P/N 35-380132-61 through 35-380132-113, as applicable Within the next 12 months after the effective date of this AD As specified in Hawker Beechcraft Recommended Service Bulletin SB 24-3807, Issued: May, 2007, and Raytheon Aircraft Company Recommended Service Bulletin SB 24-3735, Issued: August, 2005.

(2)Do not install a circuit breaker toggle switch specified in paragraph

(c)of this AD Before further flight after the replacement required by paragraph (e)(1) of this AD Not applicable. Alternative Methods of Compliance (AMOCs)

(f)The Manager, Wichita Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Jose Flores, Aviation Safety Engineer, FAA, Wichita ACO, 1801 Airport Road, Room 100, Wichita, Kansas 67209; telephone:

(316)946-4132; fax:

(316)946-4107. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Related Information

(g)To get copies of the service information referenced in this AD, contact Hawker Beechcraft Corporation, 9709 East Central, Wichita, Kansas 67291; telephone:

(800)429-5372 or

(316)676-3140. To view the AD docket, go to U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, or on the Internet at *http://dms.dot.gov.* The docket number is Docket No. FAA-2007-28434; Directorate Identifier 2007-CE-053-AD. Issued in Kansas City, Missouri, on June 29, 2007. Kim Smith, Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-13088 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28115; Directorate Identifier 2007-CE-045-AD] RIN 2120-AA64 Airworthiness Directives; British Aerospace Regional Aircraft Model HP.137 Jetstream Mk.1, Jetstream Series 200, Jetstream Series 3101, and Jetstream Model 3201 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

(AD)for the products listed above. This proposed AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: There has been a report of landing gear radius rods suffering cracks starting in the flashline near the microswitch boss. Such cracks can result in loss of the normal hydraulic system and may lead to a landing gear collapse. Main landing gear collapse is considered as potentially hazardous/catastrophic. This AD mandates additional inspections considered necessary to address the identified unsafe condition. Note: The cause of this cracking is not related to previous cracking of the radius rod cylinder addressed by BAE Systems SB 32-JA040945 (CAA AD G-2005-0010), however, the consequences of a failure are the same. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by August 6, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*

(202)493-2251. • *Mail:* Docket Management Facility, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone

(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Taylor Martin, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4138; fax:

(816)329-4090. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-28115; Directorate Identifier 2007-CE-045-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD No: 2007-0087, dated March 30, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: There has been a report of landing gear radius rods suffering cracks starting in the flashline near the microswitch boss. Such cracks can result in loss of the normal hydraulic system and may lead to a landing gear collapse. Main landing gear collapse is considered as potentially hazardous/catastrophic. This AD mandates additional inspections considered necessary to address the identified unsafe condition. Note: The cause of this cracking is not related to previous cracking of the radius rod cylinder addressed by BAE Systems SB 32-JA040945 (CAA AD G-2005-0010), however, the consequences of a failure are the same. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information British Aerospace Regional Aircraft has issued British Aerospace Jetstream Series 3100 and 3200 Service Bulletin 32-JA060741, dated November 1, 2006. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of the Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This Proposed AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 190 products of U.S. registry. We also estimate that it would take about 14 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $80 per work-hour. Parts would cost approximately $10,000 per product. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $2,112,800, or $11,120 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **British Aerospace Regional Aircraft:** Docket No. FAA-2007-28115; Directorate Identifier 2007-CE-045-AD. Comments Due Date

(a)We must receive comments by August 6, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to HP.137 Jetstream Mk. 1, Jetstream Series 200, Jetstream Series 3101, and Jetstream Model 3201 airplanes, all serial numbers, certificated in any category.

(d)Air Transport Association of America

(ATA)Code 32: Landing Gear. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: There has been a report of landing gear radius rods suffering cracks starting in the flashline near the microswitch boss. Such cracks can result in loss of the normal hydraulic system and may lead to a landing gear collapse. Main landing gear collapse is considered as potentially hazardous/catastrophic. This AD mandates additional inspections considered necessary to address the identified unsafe condition. Note: The cause of this cracking is not related to previous cracking of the radius rod cylinder addressed by BAE Systems SB 32-JA040945 (CAA AD G-2005-0010), however, the consequences of a failure are the same. Actions and Compliance

(f)Unless already done, do the following actions:

(1)Initially within the next 3 months after the effective date of this AD and repetitively thereafter at intervals not to exceed 12 months until the replacement required by paragraph (f)(2) or (f)(3) of this AD is done, inspect the main landing gear radius rod forged cylinder flashline following the accomplishment instructions of British Aerospace Jetstream Series 3100 and 3200 Service Bulletin 32-JA060741, dated November 1, 2006.

(2)If cracks are found during any inspection required by this AD, before further flight, replace the radius rod assembly with a serviceable unit.

(i)If the radius rod assembly includes the parts described in paragraphs (f)(3)(i) and (f)(3)(ii) of this AD, then the repetitive inspections of this AD are no longer required.

(ii)If the radius rod assembly does not include the parts described in paragraphs (f)(3)(i) and (f)(3)(ii) of this AD, then continue to repetitively inspect at intervals not to exceed 12 months until you comply with paragraph (f)(3) of this AD.

(3)Upon accumulating 8,000 total landings TIS on the airplane or within the next 100 hours TIS after the effective date of this AD, whichever occurs later, replace the radius rod assembly by installing the following (this terminates the repetitive inspection requirement of this AD):

(i)Part number (P/N) 1847/A to 1847/L with strike-off 12 or 13, or 1847/M or later; and

(ii)P/N 1862/A to 1862/L with strike-off 12 or 13, or 1862/M or later.

(4)*For airplanes under 8,000 total landings:* Before further flight after the initial inspection required by paragraph (f)(1) of this AD, do not install a radius rod assembly that is not of a part specified in paragraphs (f)(3)(i) and (f)(3)(ii) of this AD on an affected airplane, unless it has been inspected in accordance with the requirements of this directive.

(5)*For airplanes that have replaced or have the radius rod assembly replaced as required in paragraph (f)(3) of this AD:* Before further flight after installing the parts in paragraphs (f)(3)(i) and (f)(3)(ii) of this AD, do not install any radius rod assembly that is not part number (P/N) 1847/A to 1847/L with strike-off 12 or 13, or 1847/M or later; and P/N 1862/A to 1862/L with strike-off 12 or 13, or 1862/M or later. Note 1: When a compliance time in this AD is presented in landings and you do not keep the total landings, you may multiply the total number of airplane hours TIS by 0.75 to calculate the number of landings for the purposes of doing the actions required by this AD. Note 2: Maintenance procedures for each radius rod overhaul are included in APPH Service Bulletin 1847-32-12 or 1862-32-12, both dated September 2006, as applicable. You may still perform such maintenance through a fluorescent dye penetrant inspection of the cylinder counterbore as specified in APPH Component Maintenance Manual

(CMM)32-10-16 at Revision 11 or higher. FAA AD Differences Note 3: This AD differs from the MCAI and/or service information as follows:

(1)The MCAI and service bulletin allow the radius rod assembly to be repetitively inspected for the life of the airplane and the repetitive inspections terminated if improved design parts are installed. The affected airplanes are used in commuter operations (14 CFR part 135). The FAA's policy on aging commuter class aircraft states, when a modification exists that could eliminate or reduce the number of required critical inspections, the modification should be incorporated. Therefore, the FAA is mandating the replacement of the radius rod assembly with improved design parts no later than upon accumulating 8,000 landings on the airplane as terminating action for the repetitive inspections.

(2)The MCAI includes procedures for a maintenance overhaul referencing APPH service bulletins. Because we do not require general maintenance in our ADs, we added a note referencing these bulletins. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Staff, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Taylor Martin, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4138; fax:

(816)329-4090. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Refer to European Aviation Safety Agency

(EASA)AD No. 2007-0087, dated March 30, 2007; and BAE SYSTEMS Jetstream Series 3100 and 3200 Service Bulletin 32-JA060741, dated November 1, 2006; for related information. Issued in Kansas City, Missouri, on June 29, 2007. Kim Smith, Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-13091 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-27811; Directorate Identifier 2004-NE-11-AD] RIN 2120-AA64 Airworthiness Directives; Rolls-Royce Deutschland Tay 611-8, Tay 611-8C, Tay 620-15, Tay 650-15, and Tay 651-54 Turbofan Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to supersede an existing airworthiness directive

(AD)for Rolls-Royce Deutschland

(RRD)Tay 611-8, Tay 620-15, Tay 650-15, and Tay 651-54 turbofan engines. That AD currently requires initial and repetitive visual inspections of all ice-impact panels and fillers in the low pressure

(LP)compressor case for certain conditions and replacing as necessary, any or all panels. This proposed AD would require the same initial and repetitive inspections, provide terminating action to those repetitive actions, and add the Tay 611-8C turbofan engine to the applicability. This proposed AD results from RRD introducing new LP compressor case ice-impact panels with additional retention features, to these Tay turbofan engines. We are proposing this AD to prevent release of ice-impact panels due to improper bonding that can result in loss of thrust in both engines. DATES: We must receive any comments on this proposed AD by September 4, 2007. ADDRESSES: Use one of the following addresses to comment on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Fax:*

(202)493-2251. Contact Rolls-Royce Deutschland Ltd & Co KG, Eschenweg 11, D-15827 Dahlewitz, Germany; telephone 49

(0)33-7086-1768; fax 49

(0)33-7086-3356, for the service information referenced in this proposed AD. FOR FURTHER INFORMATION CONTACT: Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803-5299; e-mail: *Jason.yang@faa.gov* ; telephone

(781)238-7747; fax

(781)238-7199. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments regarding this proposal. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2007-27811; Directorate Identifier 2004-NE-11-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of the DMS Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78) or you may visit *http://dms.dot.gov.* Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone

(800)647-5527) is the same as the Mail address provided in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. Discussion On December 22, 2004, the FAA issued AD 2004-26-10, Amendment 39-13922 (70 FR 1172, January 6, 2005). That AD requires initial and repetitive visual inspections of all ice-impact panels and fillers in the LP compressor case for certain conditions and replacing as necessary, any or all panels. That AD also introduced a new compliance date of no later than March 1, 2005, to have all but one engine on each airplane in compliance with the polysulfide bonding of panels. Actions Since AD 2004-26-10 Was Issued Since AD 2004-26-10 was issued, the Luftfahrt-Bundesamt, (LBA), which is the airworthiness authority for Germany, notified us that RRD has introduced new LP compressor case ice-impact panels with additional retention features. The LP compressor case must be reworked to accept the new ice-impact panels, by December 31, 2011. Relevant Service Information We have reviewed and approved the technical contents of RRD Alert Service Bulletin

(ASB)No. TAY-72-A1643, Revision 1, dated November 2, 2005, and ASB No. TAY-72-A1650, dated November 2, 2005. These ASBs describe procedures for reworking the LP compressor case and installing new ice-impact panels with additional retention features. The LBA classified these ASBs as mandatory and issued AD D-2004-313R5 in order to ensure the airworthiness of these Tay turbofan engines in Germany. Bilateral Agreement Information These engine models are manufactured in Germany and are type certificated for operation in the United States under the provisions of Section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Under this bilateral airworthiness agreement, the LBA kept us informed of the situation described above. We have examined the findings of the LBA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other products of this same type design. We are proposing this AD, which would require: • Adding the Tay 611-8C turbofan engine, serial numbers below 85078, to the applicability. • Initial visual inspection of all ice-impact panels and fillers in the LP compressor case for certain conditions and replacing as necessary, any or all panels, before further flight, if not previously done. • Repetitive visual inspections of all ice-impact panels and fillers in the LP compressor case for certain conditions and replacing as necessary, any or all panels. • Having all but one engine on each airplane in compliance with the polysulfide bonding of panels. • Rework of LP compressor cases and installation of new LP compressor case ice-impact panels with additional retention features by December 31, 2011, as mandatory terminating action to the repetitive visual inspections, repairs, and replacements. The proposed AD would require that you do these actions using the service information described previously. Costs of Compliance We estimate that this proposed AD would affect about 1,085 engines installed on airplanes of U.S. registry. We also estimate that it would take about 2.5 work-hours per engine to perform an inspection, and about 12 work-hours to perform a repair as proposed. The average labor rate is $80 per work-hour. Required terminating action parts would cost about $7,500 per engine. Based on these figures, for the proposed AD, we estimate: • The cost of one inspection to the U.S. fleet to be $217,000. • The cost of a repair to the U.S fleet to be $1,041,600. • The cost of parts to the U.S. fleet for terminating action, to be $8,137,500. Docket Number Change We are transferring the docket for this AD to the Docket Management System as part of our ongoing docket management consolidation efforts. The new Docket No. is FAA-2007-27811. The old Docket No. became the Directorate Identifier, which is 2004-NE-11-AD. This AD might get logged into the DMS docket, ahead of the previously collected documents from the old docket file, as we are in the process of sending those items to the DMS. Engine Models Added and Removed From Applicability Since we issued AD 2004-26-10, turbofan engine model Tay 611-8C received a U.S. DOT FAA type certificate. We added that engine model to the applicability, as certain serial numbers of those engines are affected by this AD. Although AD 2004-26-10 inadvertently lists turbofan engine models Tay 620-15/20 and Tay 650-15/10 in the applicability, this proposed AD does not list them. Those engines do not have a U.S. DOT FAA type certificate. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed AD: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by removing Amendment 39-13922 (70 FR 1172, January 6, 2005) and by adding the following new AD: **Rolls-Royce Deutschland (Formerly Rolls-Royce plc):** Docket No. FAA-2007-27811; Directorate Identifier 2004-NE-11-AD. Comments Due Date

(a)We must receive comments on this airworthiness directive

(AD)action by September 4, 2007. Affected ADs

(b)This AD supersedes AD 2004-26-10, Amendment 39-13922. Applicability

(c)This AD applies to:

(1)RRD Tay 611-8, Tay 620-15, Tay 650-15, and Tay 651-54 turbofan engines that have one or more ice-impact panels installed in the low pressure

(LP)compressor case that conform to the Rolls-Royce Deutschland

(RRD)Service Bulletin

(SB)No. TAY-72-1326 standard.

(2)RRD Tay 611-8C turbofan engines with serial numbers

(SN)below SN 85078.

(3)The turbofan engines listed in paragraph

(c)of this AD are installed on, but not limited to, Fokker F.28 Mk.0070 and Mk.0100 series airplanes, Gulfstream Aerospace G-IV and G-IV-X series airplanes, and Boeing Company 727-100 series airplanes modified in accordance with Supplemental Type Certificate SA8472SW (727-QF). Unsafe Condition

(d)This AD results from RRD introducing new LP compressor case ice-impact panels with additional retention features, to these Tay turbofan engines. We are issuing this AD to prevent release of ice-impact panels due to improper bonding that can result in loss of thrust in both engines. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done. Inspecting Ice-Impact Panels in Tay 620-15, Tay 650-15, and Tay 651-54 Engines

(f)For airplanes that have any Tay 620-15, Tay 650-15, or Tay 651-54 engines with ice-impact panels incorporated by the RR SB No. TAY-72-1326 standard, and not all panels were repaired using polysulfide bonding material by RR repair scheme TV5451R, HRS3491, HRS3615, HRS3648, or HRS3649, do the following:

(1)Before further flight, rework all six ice-impact panels using repair scheme HRS3648 or HRS3649 on at least one of the affected engines.

(2)Before further flight, inspect the ice-impact panels and the surrounding fillers on the engine not reworked. Use paragraph 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004, and the inspection disposition criteria in Table 1 of this AD. Table 1.—Inspection Disposition Criteria If: Then:

(i)Any movement or rocking motion of LP compressor ice-impact panel, or any movement of the front edge of ice-impact panel Before further flight, replace all panels using repair scheme HRS3648 or HRS3649.

(ii)Reappearing signs of moisture on the ice-impact panel or the surrounding filler Before further flight, replace all panels using repair scheme HRS3648 or HRS3649.

(iii)Any dents or impact damage on the ice-impact panel that is greater than 3.1 square inch in total Before further flight, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(iv)Any dents or impact damage on the ice-impact panel that is between 1.55 square inch and 3.1 square inch in total Within 5 flight cycles or 5 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(v)Any dents or impact damage on the ice-impact panel that is less than 1.55 square inch in total Within 50 flight cycles or 50 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(vi)Any crack appears on the ice-impact panel and there is visible distortion of the airwashed surface Within 50 flight cycles or 50 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(vii)Any crack appears on the ice-impact panel and there is no visible distortion of the airwashed surface Within 150 flight cycles or 150 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(viii)Delamination or peeling of the compound layers of the airwashed surface and the penetrated area is greater than 3.1 square inch in total Before further flight, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(iv)Delamination or peeling of the compound layers of the airwashed surface and the penetrated area is between 1.55 square inch and 3.1 square inch in total Within 5 flight cycles or 5 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(x)Delamination or peeling of the compound layers of the airwashed surface and the penetrated area is less than 1.55 square inch in total Within 50 flight cycles or 50 flight hours, whichever occurs first, replace the damaged panel using repair scheme HRS3648 or HRS3649.

(xi)Delamination or peeling of the compound layers but the airwashed surface is not penetrated Within 150 flight cycles or 150 flight hours, whichever occurs first, repair the damaged panel using repair scheme HRS3630.

(xii)Missing filler surrounding the LP compressor case Before further flight, repair the damaged filler using repair scheme HRS3630.

(xiii)Damage to the filler surrounding the LP compressor case such as chipped, cracked, or missing material Within 25 flight cycles or 25 flight hours, whichever occurs first, repair damaged filler using repair scheme HRS 3630.

(3)Re-inspect all ice-impact panels within every 500 cycles-since-last-inspection

(CSLI)or two months since-last-inspection, whichever occurs first. Use paragraph 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004, and the inspection disposition criteria in Table 1 of this AD. Repetitive Inspections for Tay 620-15, Tay 650-15, and Tay 651-54 Engines With All Ice-Impact Panels Repaired by Polysulfide Bonding Material

(g)For Tay 620-15, Tay 650-15, and Tay 651-54 engines with ice-impact panels incorporated by the RRD SB No. TAY-72-1326 standard, and all panels were repaired using polysulfide bonding material by RR repair scheme TV5451R, HRS3491, HRS3615, HRS3648 or HRS3649, do the following:

(1)Re-inspect within every 1,500 CSLI, for the condition of the ice-impact panels and the surrounding fillers.

(2)Use paragraph 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004, and the inspection disposition criteria in Table 1 of this AD. Inspecting Ice-Impact Panels in Tay 611-8 Engines

(h)For airplanes that have any Tay 611-8 engines with ice-impact panels incorporated by the RR SB No. TAY-72-1326 standard, and RR repair scheme HRS3491 or HRS3615 was done with two pack epoxy (Omat 8/52) on one or more of the six ice-impact panels, do the following:

(1)Before further flight, rework all six ice-impact panels using repair scheme HRS3648 or HRS3649 on at least one of the affected engines.

(3)Re-inspect the ice-impact panels within every 1,000 CSLI or six months since-last-inspection, whichever occurs first. Use paragraph 3.E. of the Accomplishment Instructions of RRD SB No. TAY-72-1639, Revision 2, dated September 21, 2004, and the inspection disposition criteria in Table 1 of this AD. Repetitive Inspections for Tay 611-8 Engines With All Ice-Impact Panels Repaired by Polysulfide Bonding Material or Introduced Since New Production

(i)For Tay 611-8 engines with ice-impact panels incorporated by the RRD SB No. TAY-72-1326 standard and all panels were repaired using polysulfide bonding material by RR repair scheme TV5451R, HRS3491, HRS3615, HRS3648 or HRS3649, or panels were introduced since new production, do the following:

(1)Re-inspect within every 3,000 CSLI, for the condition of the ice-impact panels and the surrounding fillers.

(j)After the effective date of this AD, do not install any Tay 620-15, Tay 650-15, or Tay 651-54 engines with ice-impact panels if:

(1)Those ice-impact panels incorporate the RR SB No. TAY-72-1326 standard; and

(2)Ice-impact panels were repaired using RR repair scheme TV5451R, HRS3491, or HRS3615 and bonding material other than polysulfide; unless

(3)The panels and the surrounding fillers are inspected for condition using 3.B. through 3.D.(3) (in-service) or 3.K.(1) through 3.(M)(3) (at overhaul or shop visit) of the Accomplishment Instructions of RRD SB No. TAY-72-1638, Revision 2, dated September 21, 2004.

(k)Perform repetitive inspections as specified in paragraph

(g)of this AD. Installing Tay 611-8 Engines That Are Not Inspected

(l)After the effective date of this AD, do not install any Tay 611-8 engine with ice-impact panels if:

(1)Those ice-impact panels incorporate the RR SB No. TAY-72-1326 standard; and

(2)Ice-impact panels were repaired using RR repair scheme TV5451R, HRS3491, or HRS3615 and bonding material other than polysulfide, unless

(3)The panels and the surrounding fillers are inspected for condition using 3.B. through 3.D.(2) (in-service) or 3.K.(1) through 3.M.(3) (at overhaul or shop visit) of the Accomplishment Instructions of RRD SB No. TAY-72-1639, Revision 2, dated September 21, 2004.

(m)Perform repetitive inspections as specified in paragraph

(i)of this AD. Mandatory Terminating Action

(n)No later than December 31, 2011, as mandatory terminating action to the repetitive visual inspections or rework required by paragraphs (f), (g), (h), (i), (j), (k), (l), and

(m)of this AD, do the following:

(1)Rework the LP compressor case and install new LP compressor case ice-impact panels with additional retention features, at the next shop visit requiring the removal of any module, except when the work scope requires only the removal of the high speed gearbox module.

(2)For Tay 620-15, Tay 650-15, and Tay 651-54 turbofan engines, do the rework and installation using the Accomplishment Instructions of RRD Alert SB No. TAY-72-A1643, Revision 1, dated November 2, 2005.

(3)For Tay 611-8 turbofan engines, do the rework and installation using the Accomplishment Instructions of RRD Alert SB No. TAY-72-A1650, dated November 2, 2005. Tay 611-8C Turbofan Engines

(o)For Tay 611-8C turbofan engines, no later than December 31, 2011, do the following:

(1)Rework the LP compressor case and install new LP compressor case ice-impact panels with additional retention features, at the next shop visit after the effective date of this AD, requiring the removal of any module, except when the work scope requires only the removal of the high speed gearbox module.

(2)Do the rework and installation using the Accomplishment Instructions of RRD Alert SB No. TAY-72-A1650, dated November 2, 2005. Alternative Methods of Compliance

(p)The Manager, Engine Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Related Information

(q)German AD D2004-313R5, dated November 15, 2005, also addresses the subject of this AD.

(r)Contact Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803-5299; e-mail: *Jason.yang@faa.gov* ; telephone

(781)238-7747; fax

(781)238-7199, for more information about this AD. Issued in Burlington, Massachusetts, on June 29, 2007. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-13090 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28384; Directorate Identifier 2006-NM-165-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-600, -700, -700C -800, and -900 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for certain Boeing Model 737-600, -700, -700C, -800, and -900 series airplanes. This proposed AD would require revising the Airworthiness Limitations

(AWLs)section of the Instructions for Continued Airworthiness by incorporating new limitations for fuel tank systems to satisfy Special Federal Aviation Regulation No. 88 requirements. This proposed AD would also require the initial inspection of a certain repetitive AWL inspection to phase in that inspection, and repair if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by August 20, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*

(425)917-6505; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28384; Directorate Identifier 2006-NM-165-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov* . Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* , or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone

(MPD)Document, D626A001-CMR, Section 9, Revision March 2006 (hereafter referred to as “Revision March 2006 of the MPD”): • Subsection D, “AIRWORTHINESS LIMITATIONS—SYSTEMS” • Subsection E, “PAGE FORMAT: SYSTEM AIRWORTHINESS LIMITATIONS” • Subsection F, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEM AWLs” Those subsections of Revision March 2006 of the MPD describe new airworthiness limitations

(AWLs)for fuel tank systems. The new AWLs include: • AWL inspections, which are periodic inspections of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCLs), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require revising the AWLs section of the Instructions for Continued Airworthiness by incorporating the information in Subsections D, E, and F of Revision March 2006 of the MPD. This proposed AD would also require the initial inspection of a certain repetitive AWL inspection to phase in that inspection, and repair if necessary. Explanation of Compliance Time In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended by Boeing. Rework Required When Implementing AWLs Into an Existing Fleet The AWLs revision for the fuel tank systems specified in paragraph

(g)of this proposed AD, which involves incorporating the information specified in Revision March 2006 of the MPD, would affect how operators maintain their airplanes. After doing that AWLs revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before the AWLs revision specified in paragraph

(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual

(CMM)applies to fuel pumps repaired after the AWLs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date the AWL revision specified in paragraph

(g)is done, except as provided by paragraph

(h)of this proposed AD. This proposed AD would require only the AWLs revision specified in paragraph (g), and initial inspections specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph

(g)of this proposed AD would require revising the AWLs section of the Instructions for Continued Airworthiness by incorporating certain information specified in Revision March 2006 of the MPD into the MPD. Paragraph

(g)allows accomplishing the AWL revision in accordance with later revisions of the MPD as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Paragraph

(h)allows accomplishing the initial inspections and repair in accordance with later revisions of the MPD as an acceptable method of compliance if they are approved by the Manager, Seattle ACO. In addition, Subsection D of Revision March 2006 of the MPD specifies that any deviations from the published AWL instructions, including AWL intervals, in that MPD must be approved by the Manager, Seattle ACO. Therefore, after the AWLs revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector

(PMI)or Principal Avionics Inspector

(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions Subsection D of Revision March 2006 of the MPD has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in Subsection D without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in Revision March 2006 of the MPD, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix 1 of this proposed AD contains a list of Air Transport Association

(ATA)sections for the revised maintenance manuals. Operators might wish to use the appendix as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. Some of the AWLs contained in Subsection F of Revision March 2006 of the MPD are inspections for which the applicable sections of the operating rules apply. Other AWLs are CDCCLs, which are tied to conditional maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in Subsection F of Revision March 2006 of the MPD refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referring to the CMMs by revision level in the applicable AWL for certain components rather than including information directly in the MPD because of the volume of that information. As a result, the Manager, Seattle ACO, must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval

(PMA)approved parts), methods, techniques, and practices not contained in the CMMs need to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, certain pump repair/overhaul manuals must be approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in Subsection F of Revision March 2006 of the MPD, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks may be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 1960 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Parts Cost per airplane Number of U.S.-registered airplanes Fleet cost AWLs revision 8 None $640 682 $436,480 Inspection 8 None 640 682 436,480 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28384; Directorate Identifier 2006-NM-165-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by August 20, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Boeing Model 737-600, -700, -700C -800, and -900 series airplanes, certificated in any category, with an original standard airworthiness certificate or original export certificate of airworthiness issued before March 31, 2006. Note 1: Airplanes with an original standard airworthiness certificate or original export certificate of airworthiness issued on or after March 31, 2006, must already be in compliance with the airworthiness limitations specified in this AD because those limitations were applicable as part of the airworthiness certification of those airplanes. Note 2: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations

(AWLs)in the Boeing 737-600/700/700C/700IGW/800/900 Maintenance Planning Data

(MPD)Document, D626A001-CMR, according to paragraph

(g)or

(i)of this AD, as applicable. Unsafe Condition

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information Reference

(f)The term “Revision March 2006 of the MPD” as used in this AD, means Boeing 737-600/700/700C/700IGW/800/900 Maintenance Planning Data

(MPD)Document, D626A001-CMR, Section 9, Revision March 2006. Revision to AWLs Section

(g)Before December 16, 2008, revise the AWLs section of the Instructions for Continued Airworthiness by incorporating into the MPD the information in the subsections specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD; except that the initial inspection required by paragraph

(h)of this AD must be done at the applicable compliance time specified in that paragraph. Accomplishing the revision in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA.

(1)Subsection D, “AIRWORTHINESS LIMITATIONS—SYSTEMS,” of Revision March 2006 of the MPD.

(2)Subsection E, “PAGE FORMAT: SYSTEM AIRWORTHINESS LIMITATIONS,” of Revision March 2006 of the MPD.

(3)Subsection F, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEM AWLs,” of Revision March 2006 of the MPD. Initial Inspection and Repair if Necessary

(FQIS)wiring to verify functional integrity, in accordance with AWL Number 28-AWL-03 of Subsection F of Revision March 2006 of the MPD. If any discrepancy is found during the inspection, repair the discrepancy before further flight in accordance with AWL Number 28-AWL-03 of Subsection F of Revision March 2006 of the MPD. Accomplishing the actions required by this paragraph in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO. Note 3: For the purposes of this AD, a special detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. The examination is likely to make extensive use of specialized inspection techniques and/or equipment. Intricate cleaning and substantial access or disassembly procedure may be required.”

(2)Within 24 months after the effective date of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Appendix 1.—Implementing Fuel Tank System Airworthiness Limitations on Model 737-600, -700, -700C -800, and -900 Series Airplanes AWL No. ALI/CDCCL ATA section or CMM document Task title Task No. 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Center Fuel Tank Inspection 28-11-00-211-801. 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-03 ALI AMM 05-55-54/601 FQIS Wiring and Bonding—Inspection 05-55-54-200-801. 28-AWL-04 CDCCL SWPM 20-10-15 Assembly of Shield Ground Wires. 28-AWL-05 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-06 CDCCL CMM 28-41-87, Revision 1, or subsequent revisions. 28-AWL-07 CDCCL AMM 28-41-24/401 Densitometer Hot Short Protector—Installation 28-41-24-400-801. 28-AWL-08 CDCCL CMM 28-41-76, Revision 1; CMM 28-41-75, Revision 0; CMM 28-40-59, Revision E; CMM 28-41-62, Revision 1; CMM 28-41-63, Revision 1; or subsequent revisions. 28-AWL-09 CDCCL SWPM 20-14-12 Repair of Fuel Quantity Indicator System

(FQIS)Wire Harness. AMM 28-41-44/401 FQIS Wire Harness Replacement 28-41-44-400-801. AMM 28-41-42/401 FQIS Spar Penetration Connector—Installation 28-41-42-420-801. 28-AWL-10 CDCCL AMM 29-11-04/401 Heat Exchanger Installation 29-11-04-400-801. 28-AWL-11 CDCCL AMM 28-22-15/401 Fuel Line, Fitting, and Coupling Installation 28-22-15-400-801. 28-AWL-12 CDCCL 28-AWL-13 CDCCL CMM 28-22-08, Revision 0; CMM 28-22-09, Revision 2; CMM 28-20-02, Revision 9; or subsequent revisions. 28-AWL-14 CDCCL AMM 28-22-41/401 Install the Motor Impeller 28-22-41-400-801. 28-AWL-15 CDCCL AMM 28-21-71/401 Float Switch Installation 28-21-71-400-802. Float Switch Removal 28-21-71-020-801. 28-AWL-16 CDCCL AMM 28-11-11/401 Main Tank Access Door Installation Surge Tank Access Door—Installation 28-11-11-400-801. 28-11-11-400-802. AMM 28-11-31/401 Center Tank Access Door—Installation 28-11-31-400-801. 28-AWL-17 CDCCL AMM 28-13-41/401 Relief Valve Installation 28-13-41-400-801. AMM 28-13-31/401 Flame Arrestor Installation 28-13-31-400-801. 28-AWL-18 CDCCL FIM 28-22-00/201 No. 1 Tank, Forward Boost Pump Circuit Breaker Open—Fault Isolation 28-22 Task 813. No. 1 Tank, Aft Boost Pump Circuit Breaker Open—Fault Isolation 28-22 Task 814. No. 2 Tank, Forward Boost Pump Circuit Breaker Open—Fault Isolation 28-22 Task 815. No. 2 Tank, Aft Boost Pump Circuit Breaker Open—Fault Isolation 28-22 Task 816. Center Tank, Left Boost Pump Circuit Breaker Open—Fault Isolation 28-22 Task 817. Center Tank, Right Boost Pump Circuit Breaker Open—Fault Isolation 28-22 Task 818. 28-AWL-19 ALI AMM 28-22-00/501 Center Tank Boost Pump Auto Shutoff Functional Test 28-22-00-720-805. 28-AWL-20 28-AWL-21 CDCCL AMM 28-22-11/401 Install the Actuator of the Spar Valve 28-22-11-400-804. Install the Valve Adapter of the Spar Valve 28-22-11-400-805. AMM 28-22-21/401 Install the Actuator of the Engine Fuel Crossfeed Valve 28-22-21-400-804. Install the Engine Fuel Crossfeed Valve Adapter 28-22-21-400-805. 28-AWL-22 CDCCL CMM 28-20-21 Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-13116 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28619; Directorate Identifier 2007-NM-004-AD] RIN 2120-AA64 Airworthiness Directives; Viking Air Limited Model DHC-7 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for all Viking Air Limited Model DHC-7 airplanes. This proposed AD would require an inspection of certain SM-200 servo drive units (power servo motor and housing assemblies) for certain markings, related investigative action if necessary, and modification if necessary. This proposed AD results from a report that some SM-200 servo drive units that were not in configuration MOD H are installed on Model DHC-7 airplanes. MOD H prevents the internal clutch fasteners from backing out. We are proposing this AD to prevent the possibility of internal clutch fasteners from backing out, which could cause an inadvertent servo engagement and consequent reduced controllability of the airplane. DATES: We must receive comments on this proposed AD by August 6, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*

(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Viking Air Limited, 9574 Hampden Road, Sidney, British Columbia V8L 5V5, Canada, for service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Ezra Sasson, Aerospace Engineer, Airframe and Propulsion Branch, ANE-171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone

(516)228-7320; fax

(516)794-5531. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28619; Directorate Identifier 2007-NM-004-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone

(800)647-5527) is located on the ground floor of the West Building at the street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion Transport Canada Civil Aviation (TCCA), which is the airworthiness authority for Canada, notified us that an unsafe condition might exist on all Viking Air Limited Model DHC-7 airplanes. TCCA advises that investigation revealed that some SM-200 servo drive units (power servo motor and housing assemblies) within certain date codes installed on the automatic flight control system of the de Havilland DHC-7 aircraft were mislabeled as having been manufactured to MOD H configuration when, in fact, they did not have MOD H installed. MOD H prevents the possibility of internal clutch fasteners from backing out. This condition, if not corrected, could result in the internal clutch fasteners backing out, which could cause an inadvertent servo engagement and consequent reduced controllability of the airplane. Relevant Service Information Viking has issued Alert Service Bulletin 7-22-20, dated May 29, 2006. The alert service bulletin describes procedures for doing an inspection of the SM-200 power servo motor and housing assembly, part numbers 4006719-904, -913, and -933, to determine if MOD H is marked, related investigative action if necessary, and modification of the power servo motor and housing assembly if necessary. The related investigative action is an inspection for certain dates of power servo motor and housing assemblies that have been marked MOD H. Modifications are done if MOD H is not marked on the power servo motor and housing assembly and if power servo motor and housing assemblies that have been marked MOD H are within certain dates. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. TCCA mandated the service information and issued Canadian airworthiness directive CF-2006-18, dated July 17, 2006, to ensure the continued airworthiness of these airplanes in Canada. The alert service bulletin refers to Honeywell Alert Service Bulletin 4006719-22-A0016 (Pub. No. A21-1146-008), Revision 001, dated November 1, 2004 as an additional source of service information for doing the inspection and modification. FAA's Determination and Requirements of the Proposed AD These airplanes are manufactured in Canada and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, TCCA has kept the FAA informed of the situation described above. We have examined TCCA's findings, evaluated all pertinent information, and determined that we need to issue an AD for airplanes of this type design that are certificated for operation in the United States. Therefore, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance The following table provides the estimated costs for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Average labor rate per hour Cost per airplane Number of U.S.-registered airplanes Fleet cost Inspection 1 $80 $80 21 $1,680 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Viking Air Limited (Formerly Bombardier, Inc.)** : Docket No. FAA-2007-28619; Directorate Identifier 2007-NM-004-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by August 6, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to all Viking Air Limited Model DHC-7-1, DHC-7-100, DHC-7-101, DHC-7-102, and DHC-7-103 airplanes, certificated in any category. Unsafe Condition

(d)This AD results from a report that some SM-200 servo drive units (power servo motor and housing assemblies) that were not in configuration MOD H are installed on Model DHC-7 airplanes. MOD H prevents the possibility of internal clutch fasteners from backing out. We are issuing this AD to prevent the internal clutch fasteners from backing out, which could cause an inadvertent servo engagement and consequent reduced controllability of the airplane. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Inspection and Modification

(f)Within 12 months after the effective date of this AD: Inspect the SM-200 power servo motor and housing assembly, part numbers 4006719-904, -913 and -933, to determine if MOD H is marked, and before further flight, do all applicable related investigative action and modifications of the power servo motor and housing assembly, in accordance with the Accomplishment Instructions of Viking Alert Service Bulletin 7-22-20, dated May 29, 2006. Note 1: The alert service bulletin refers to Honeywell Alert Service Bulletin 4006719-22-A0016 (Pub. No. A21-1146-008), Revision 001, dated November 1, 2004, as an additional source of service information for doing the inspection, related investigative action, and modifications. Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, New York Aircraft Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Related Information

(h)Canadian airworthiness directive CF-2006-18, dated July 17, 2006, also addresses the subject of this AD. Issued in Renton, Washington, on June 25, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-13125 Filed 7-5-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1, 53, 54 and 301 [REG-142039-06; REG-139268-06] RIN 1545-BG18; 1545-BG20 Excise Taxes on Prohibited Tax Shelter Transactions and Related Disclosure Requirements; Disclosure Requirements With Respect to Prohibited Tax Shelter Transactions; Requirement of Return and Time for Filing AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by reference to temporary regulations and notice of proposed rulemaking. SUMMARY: This document contains proposed regulations that provide guidance under section 4965 of the Internal Revenue Code (Code), relating to entity-level and manager-level excise taxes with respect to prohibited tax shelter transactions to which tax-exempt entities are parties; §§ 6033(a)(2) and 6011(g), relating to certain disclosure obligations with respect to such transactions; and §§ 6011 and 6071, relating to the requirement of a return and time for filing with respect to section 4965 taxes. In the Rules and Regulations section of this issue of the **Federal Register** , the IRS is issuing cross-referencing temporary regulations that provide guidance under § 6033(a)(2), relating to certain disclosure obligations with respect to prohibited tax shelter transactions; and §§ 6011 and 6071, relating to the requirement of a return and time for filing with respect to § 4965 taxes. This action is necessary to implement § 516 of the Tax Increase Prevention Reconciliation Act of 2005. These proposed regulations affect a broad array of tax-exempt entities, including charities, state and local government entities, Indian tribal governments and employee benefit plans, as well as entity managers of these entities. DATES: Written or electronic comments and requests for a public hearing must be received by October 4, 2007. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-142039-06; REG-139268-06), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-142039-06, REG-139268-06), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. Alternatively, taxpayers may submit comments electronically via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS-REG-142039-06; REG-139268-06). FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Galina Kolomietz,

(202)622-6070 or Michael Blumenfeld,

(202)622-1124; concerning submission of comments and requests for a public hearing, Richard Hurst, *Richard.A.Hurst@irscounsel.treas.gov* (not toll-free numbers). For questions specifically relating to qualified pension plans, individual retirement accounts, and similar tax-favored savings arrangements, contact Dana Barry,

(202)622-6060 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. The collection of information in this proposed regulation is in § 301.6011(g)-1. The collection of information in § 301.6011(g)-1 flows from section 6011(g) which requires a taxable party to a prohibited tax shelter transaction to disclose to any tax-exempt entity that is a party to the transaction that the transaction is a prohibited tax shelter transaction. The likely recordkeepers are taxable entities or individuals that participate in prohibited tax shelter transactions. Estimated number of recordkeepers: 1,250 to 6500. The information that is required to be collected for purposes of § 301.6011(g)-1 is a subset of information that is required to be collected in order to complete and file Form 8886, “Reportable Transaction Disclosure Statement.” The estimated paperwork burden for taxpayers filling out Form 8886 is approved under OMB number 1545-1800 and is as follows: Recordkeeping 6 hr., 13 min. Learning about the law or the form 4 hr., 28 min. Preparing, copying, assembling, and sending the form to the IRS 4 hr., 46 min. Based on the numbers in the preceding paragraph, the total estimated burden per recordkeeper complying with the disclosure requirement in § 301.6011(g)-1 will not exceed 15 hr., 27 min. This burden has been submitted to the Office of Management and Budget for review. Books and records relating to the collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Background The Tax Increase Prevention and Reconciliation Act of 2005, Public Law 109-222 (120 Stat. 345) (TIPRA), enacted on May 17, 2006, defines certain transactions as prohibited tax shelter transactions and imposes excise taxes and disclosure requirements with respect to prohibited tax shelter transactions to which a tax-exempt entity is a party. Section 516 of TIPRA creates new § 4965 and amends §§ 6033(a)(2) and 6011(g) of the Code. On July 11, 2006, the IRS released Notice 2006-65 (2006-31 IRB 102), which alerted taxpayers to the new provisions and solicited comments regarding these provisions. One hundred written comments and numerous phone calls were received in response to the request for comments contained in Notice 2006-65. On February 7, 2007, the IRS released Notice 2007-18 (2007-9 IRB 608), which provided interim guidance regarding the circumstances under which a tax-exempt entity will be treated as a party to a prohibited tax shelter transaction and regarding the allocation to various periods of net income and proceeds attributable to a prohibited tax shelter transaction, including amounts received prior to the effective date of the § 4965 tax. Notice 2007-18 also solicited comments from the public regarding these and other issues raised by § 4965. Eight written comments and numerous phone calls were received in response to the request for comments contained in Notice 2007-18. See § 601.601(d)(2)(ii)( *b* ). The comments received in response to Notice 2006-65 and Notice 2007-18 addressed all aspects of the new excise taxes and disclosure requirements. While some comments discussed the implications of a broad application of the new excise taxes and disclosure requirements, commentators generally responded favorably to Congress' effort to restrict tax-exempt entities from being involved in Federal tax avoidance schemes. Commentators noted the lack of meaningful penalties prior to TIPRA for tax-exempt entities involved in tax shelter transactions and the need for disclosure in the case where a tax-exempt entity is improperly using its tax-exempt status to facilitate a tax shelter transaction. After consideration of all comments received, the IRS and the Treasury Department are issuing the following proposed regulations and soliciting comments thereon. The major areas of comments and the IRS and Treasury Department's responses thereto are discussed in the following sections. Explanation of Provisions Covered Tax-Exempt Entities Section 4965(c) defines the term “tax-exempt entity” for § 4965 purposes by reference to §§ 501(c), 501(d), 170(c), 7701(a)(40), 4979(e) (paragraphs (1),

(2)and (3)), 529, 457(b), and 4973(a). The proposed regulations describe the types of entities captured by the statutory cross-references in § 4965(c). Definition of Prohibited Tax Shelter Transactions Section 4965(e) defines the term “prohibited tax shelter transaction” by reference to § 6707A(c)(1) and (c)(2). In accordance with the statutory definition, the proposed regulations define the term “prohibited tax shelter transaction” by reference to the definition of the term “reportable transaction” in § 6707A(c)(1) and (c)(2) and the regulations under § 6011. The proposed regulations define a subsequently listed transaction as a transaction (other than a reportable transaction within the meaning of § 6707A(c)(1)) to which a tax-exempt entity becomes a party before the transaction becomes a listed transaction within the meaning of § 6707A(c)(2). Several commentators expressed concern over the severe penalties imposed on tax-exempt entities and entity managers for participating in many common and legitimate transactions which have no tax avoidance purpose, yet may fall within the definition of prohibited tax shelter transaction. The commentators suggested that the IRS and the Treasury Department carve out certain types of transactions from the definition of “prohibited tax shelter transaction” or revise current listing procedures to give taxpayers an opportunity to object to the identification of a specific transaction as a tax avoidance transaction. Some commentators recommended that any future published guidance which designates a transaction as a listed or reportable transaction be issued with a prospective effective date and state that it will not apply retroactively. Several commentators requested that the proposed regulations identify listed, subsequently listed, confidential and contractual protection transactions that would not be treated as prohibited tax shelter transactions for purposes of § 4965. The above recommendations are not adopted in these proposed regulations because § 4965 defines the term “prohibited tax shelter transaction” by reference to the existing reportable transaction regime. Any additions to, or exclusions from, the definition of reportable transactions, or any changes to the current listing procedures, must be made within the framework of § 6011 rather than § 4965. One commentator suggested that the term “reportable transaction” should be narrowly interpreted for purposes of § 4965. However, this term already has been defined under § 6011, and consequently, these proposed regulations interpret it consistently for § 4965 and § 6011 purposes. Definition of Tax-Exempt Party to a Prohibited Tax Shelter Transaction Excise taxes under § 4965 apply only if a tax-exempt entity is a party to a prohibited tax shelter transaction. A number of commentators requested guidance in determining when a tax-exempt entity is a *party* to a prohibited tax shelter transaction. Notice 2007-18 defined the term *party* as a tax-exempt entity that facilitates a prohibited tax shelter transaction by reason of its tax-exempt, tax indifferent or tax-favored status. The proposed regulations incorporate this definition of the term *party.* Notice 2007-18 also notified the public that the IRS and the Treasury Department would provide a broader definition of the term *party* in future guidance in accordance with § 4965. Consistent with Notice 2007-18, the proposed regulations define the term “party” for purposes of §§ 4965 and 6033(a)(2) to include a tax-exempt entity that enters into a listed transaction and reflects on its tax return a reduction or elimination of its liability for applicable Federal employment, excise or unrelated business income taxes that is derived directly or indirectly from tax consequences or tax strategy described in the published guidance that lists the transaction. Several commentators specifically requested that the proposed regulations address under what circumstances, if any, a tax-exempt entity may be treated as a party to a prohibited tax shelter transaction if the tax-exempt entity is an investor in a partnership, hedge fund or other conduit. Invoking the language in the legislative history to § 4965, commentators recommended that the IRS and Treasury Department establish a rule or a safe harbor that would treat an investor in an indirect investment activity as being a party for § 4965 purposes only in limited circumstances. As illustrated by an example in the proposed regulations, a tax-exempt entity does not become a party to a prohibited tax shelter transaction solely because it invests in an entity that in turn becomes involved in a prohibited tax shelter transaction. To be considered a “party” under the proposed regulations, the tax-exempt entity must either facilitate the prohibited tax shelter transaction by reason of its tax-exempt, tax indifferent or tax-favored status, or must treat the prohibited tax shelter transaction on its tax return as reducing or eliminating its own Federal tax liability. The IRS and the Treasury Department request comments on any further clarifications that may be helpful in reflecting the intended application of the statute as expressed in the legislative history. Entity Managers and Related Definitions The proposed regulations clarify the definition of the term “entity manager” in § 4965(d) and provide guidance on persons who could be entity managers pursuant to a delegation of authority from other entity managers. The proposed regulations also define the term “approve or otherwise cause.” Under § 4965(a)(2), an entity manager may be liable for the manager-level excise tax only if the manager “approves such entity as (or otherwise causes such entity to be) a party” to a prohibited tax shelter transaction and knows or has reason to know the transaction is a prohibited tax shelter transaction. The proposed regulations generally limit the definition of “approving or otherwise causing” to affirmative actions of persons who, individually or as members of a collective body, have the authority to commit the entity to the transaction. One commentator requested guidance on whether entity managers may be liable for § 4965 taxes in successor-in-interest situations. Several commentators requested guidance on the consequences under § 4965 of the exercise or nonexercise of certain options pursuant to the terms of the transaction. In response to these comments, the proposed regulations provide rules for successor-in-interest situations and the consequences of the exercise or nonexercise of certain options. Meaning of “Knows or Has Reason To Know” The level of tax imposed on the tax-exempt entity under § 4965(b)(1) depends upon whether the entity knows or has reason to know, at the time it enters into the transaction, that it is becoming a party to a prohibited tax shelter transaction. The liability of the entity manager for the tax under § 4965(b)(2) depends on whether the entity manager knows or has reason to know that the transaction is a prohibited tax shelter transaction at the time of approving or otherwise causing the entity to be a party to the transaction. The proposed regulations treat the entity as knowing or having reason to know if its manager(s) knew or had reason to know and provide rules for determining whether entity managers knew or had reason to know. The “reason-to-know” rules in these proposed regulations are consistent with the “reason-to-know” and “should have known” standards under other provisions of the Code. Commentators recommended that the IRS and the Treasury Department not treat receipt of a disclosure statement regarding a transaction by the tax-exempt entity as conclusive evidence that the tax-exempt entity knew or had reason to know that the transaction was a prohibited tax shelter transaction. The proposed regulations adopt this recommendation and provide that receipt by an entity manager of a disclosure statement in advance of a transaction is a relevant factor but, by itself, does not necessarily demonstrate that the tax-exempt entity or any of its managers knew or had reason to know that the transaction was a prohibited tax shelter transaction. Taxes on Prohibited Tax Shelter Transactions Section 4965(b)(1) provides the rules for computing the entity-level excise tax with respect to prohibited tax shelter transactions. Section 4965(b)(2) imposes a flat $20,000 excise tax on any entity manager that approved or otherwise caused the entity to become a party to a prohibited tax shelter transaction. The proposed regulations follow the computational rules in the statute, define the term “taxable year” for purposes of determining the entity-level tax under § 4965, and clarify the timing of the entity manager taxes under § 4965. The proposed regulations provide that entity manager liability for § 4965 taxes is not joint and several. Definition of Net Income and Proceeds and Their Allocation to Various Periods The proposed regulations define the terms “net income” and “proceeds” for § 4965 purposes and provide rules regarding the allocation of net income or proceeds attributable to a prohibited tax shelter transaction to various periods, including the appropriate treatment of net income or proceeds received prior to the effective date of the § 4965(a) tax. Commentators recommended that net income for purposes of § 4965 be determined in a manner consistent with the determination of net income for other purposes of the Code. The proposed regulations adopt this recommendation. Numerous commentators requested guidance in determining what amounts constitute proceeds for section 4965 purposes and urged the IRS and the Treasury Department to limit the definition of proceeds to the tax-exempt entity's economic return from the transaction. One commentator recommended that return of basis and return of capital be excluded from the definition of proceeds as these amounts are arguably not “attributable to” a prohibited tax shelter transaction. Several commentators recommended that the IRS and the Treasury Department adopt a rule that would exclude from proceeds earnings on certain set-aside amounts that are used to defease the tax-exempt entity's obligations under so-called sale-in, lease-out

(SILO)and lease-in, lease-out

(LILO)transactions. See Notice 2000-15 (2000-1 CB 826), and Notice 2005-13 (2005-9 IRB 630). Several commentators suggested that nonexercise of options to repurchase in the SILO/LILO context should not be treated as giving rise to net income or proceeds. See § 601.601(d)(2)(ii)( *b* ). The proposed regulations define the term proceeds separately for tax-exempt entities that are involved in prohibited tax shelter transactions to facilitate the tax avoidance of others and tax-exempt entities that are involved in listed transactions for their own tax benefit. In the case of tax-exempt entities that are involved in prohibited tax shelter transactions to facilitate the tax avoidance of others, the proposed regulations define proceeds as the gross amount of the tax-exempt entity's consideration for facilitating the transaction, not reduced by any costs or expenses attributable to the transaction. This definition subjects the tax-exempt party's economic return from the transaction to the entity-level excise tax. In the case of tax-exempt entities that are involved in listed transactions to reduce or eliminate their own tax liability, the proposed regulations define the term proceeds as tax savings purportedly generated by the transaction and claimed by the tax-exempt entity in the tax year. In Notice 2007-18, the IRS and Treasury Department provided that the allocation of net income and proceeds is determined according to normal tax accounting rules. The proposed regulations incorporate this rule both for purposes of allocating amounts to pre- and post-effective date periods, and allocating amounts to pre- and post-listing periods where a subsequently listed transaction is involved. Under the proposed regulations, tax-exempt entities that have not adopted a method of accounting are required to use the cash method. Several commentators recommended that the IRS adopt a position that net income or proceeds from pre-enactment transactions would not be properly allocable to any periods after the effective date of the section 4965(a) tax. The IRS and the Treasury Department decline to adopt this blanket rule because such rule would be inconsistent with established principles of tax accounting and would conflict with the plain language of the effective date provisions in section 516 of TIPRA. Effective Dates of the Taxes In accordance with section 516(d) of TIPRA, the proposed regulations provide that the taxes under section 4965 are effective for taxable years ending after May 17, 2006, with respect to transactions entered into before, on or after such date, except that no tax under section 4965(a) applies with respect to income or proceeds that are properly allocable to any period ending on or before August 15, 2006. The proposed regulations also provide that the 100 percent entity-level tax under section 4965(b)(1)(B) with respect to knowing transactions does not apply to prohibited tax shelter transactions entered into by a tax-exempt entity on or before May 17, 2006 and that the IRS will not assert an entity manager tax under section 4965(b)(2) with respect to any prohibited tax shelter transaction entered into by a tax-exempt entity on or before May 17, 2006. In addition, the proposed regulations provide that the 100 percent entity-level tax under section 4965(b)(1)(B) and the entity manager tax under section 4965(b)(2) do not apply with respect to any subsequently listed transaction. Numerous commentators questioned whether it would be appropriate to apply the new excise taxes to pre-enactment transactions that already have closed and advocated a narrow application of the new excise taxes to pre-enactment transactions. The commentators argued that it would be unfair to apply the new excise taxes to pre-enactment transactions that have already closed and subject tax-exempt entities to unforeseen, harsh penalties. The commentators recommended that all transactions closed prior to May 17, 2006, be “delisted” for purposes of section 4965. The proposed regulations do not adopt these recommendations as they are inconsistent with the statutory effective date of section 4965 and the statutory definition of prohibited tax shelter transaction. When finalized, the regulations under section 4965 are proposed to be applicable for taxable years ending after July 6, 2007. Taxpayers may rely on these proposed regulations for periods ending on or before such date. Disclosure by Tax-Exempt Entities That Are Parties to Certain Reportable Transactions Section 6033(a)(2), as amended by TIPRA, requires every tax-exempt entity that is a party to a prohibited tax shelter transaction to disclose to the IRS, in such form and manner and at such time as determined by the Secretary, such entity's being a party to such transaction and the identity of any other party to the transaction which is known to the tax-exempt entity. The statute gives the IRS discretion with respect to the form, manner and timing of this disclosure. The proposed regulations provide rules regarding the form, manner and timing of this disclosure. With respect to the due date for the disclosure, the proposed regulations provide that, in the case of tax-exempt entities that are involved in prohibited tax shelter transactions to facilitate the tax avoidance of others, the disclosure must be filed by May 15 of the calendar year following the close of the calendar year during which the tax-exempt entity entered into the prohibited tax shelter transaction (or, in the case of subsequently listed transactions, by May 15 of the calendar year following the close of the calendar year during which the transaction was identified by the Secretary as a listed transaction). In the case of tax-exempt entities that are involved in listed transactions to reduce or eliminate their own tax liability, the proposed regulations provide that the disclosure must be filed on or before the date on which the first tax return (whether an original or an amended return) is filed on which the tax-exempt entity reflects a reduction or elimination of its liability for applicable Federal employment, excise or unrelated business income taxes that is derived directly or indirectly from tax consequences or tax strategy described in the published guidance that lists the transaction. Temporary regulations providing the same rules are being issued concurrently with these proposed regulations. The temporary regulations under section 6033(a)(2) apply to disclosures with respect to transactions entered into by a tax-exempt entity after May 17, 2006. Transition relief is provided with respect to transactions entered into during a transition period beginning on May 18, 2006 and ending on December 31, 2006. The due date for the disclosure with respect to the transactions entered into during the transition period is November 5, 2007 or, in the case of tax-exempt entities that are involved in listed transactions to reduce or eliminate their own tax liability, the later of: the date on which the first tax return (whether an original or an amended return) is filed on which the tax-exempt entity reflects a reduction or elimination of its liability for applicable Federal employment, excise or unrelated business income taxes that is derived directly or indirectly from tax consequences or tax strategy described in the published guidance that lists the transaction; or November 5, 2007. Disclosure by Taxable Party to the Tax-Exempt Entity Section 6011(g), as amended by TIPRA, requires any taxable party to a prohibited tax shelter transaction to notify any tax-exempt entity which is a party to such transaction that the transaction is a prohibited tax shelter transaction. The statute is silent as to how and when the section 6011(g) disclosure needs to be made. The proposed regulations provide rules regarding the form, timing and frequency of the section 6011(g) disclosure. The proposed regulations also explain to whom the section 6011(g) disclosure must be made. With respect to the due date for the disclosure, the proposed regulations provide that the disclosure to each tax-exempt entity that is a party to the transaction must be made within 60 days after the last to occur of:

(1)The date the taxable person becomes a taxable party to the transaction; or

(2)the date the taxable party knows or has reason to know that the tax-exempt entity is a party to the transaction. No disclosure is required if the taxable party does not know or have reason to know that the tax-exempt entity is a party to the transaction on or before the first date on which the transaction is required to be disclosed by the taxable party under §§ 1.6011-4, 20.6011-4, 25.6011-4, 31.6011-4, 53.6011-4, 54.6011-4, or 56.6011-4. One commentator recommended that the IRS provide an exception to the disclosure requirements for any transactions for which there would be no income or proceeds subject to the taxes imposed by section 4965. The proposed regulations do not adopt this recommendation because one of the purposes of section 6011(g) disclosure is to notify the tax-exempt entity that it may have a disclosure obligation under section 6033(a)(2) with respect to the transaction. When finalized, the proposed regulations under section 6011(g) will apply to disclosures with respect to transactions entered into by a tax-exempt entity after May 17, 2006. Payment of Section 4965 Taxes The proposed regulations amend the existing regulations under sections 6011 and 6071 to specify the forms that must be used to pay section 4965 taxes and to provide the due dates for filing these forms. With respect to the due dates, the proposed regulations provide that a return of the entity-level excise tax under section 4965 must be made on or before the due date (not including extensions) for filing the tax-exempt entity's annual information return under section 6033(a)(1). If the tax-exempt entity is not required to file an annual information return, the return of section 4965 taxes must be made on or before the 15th day of the fifth month after the end of the tax-exempt entity's annual accounting period. A return of manager-level excise tax under section 4965 must be made on or before the 15th day of the fifth month following the close of the entity manager's taxable year during which the entity entered into the prohibited tax shelter transaction. Temporary regulations providing the same rules are being issued concurrently with these proposed regulations. A commentator recommended that the IRS and the Treasury Department not make the section 4965 excise taxes effective prior to the issuance of final regulations in cases where application of the new law or provisions of the new law is unclear. The proposed regulations do not adopt this recommendation because the effective date for the section 4965 taxes is statutory. One commentator recommended that the IRS waive the excise taxes under section 4965 in appropriate circumstances. The proposed regulations do not adopt this recommendation as the obligation to pay section 4965 taxes flows directly from the statute, which does not authorize the IRS to waive the entity-level or manager-level taxes. The amendments and additions to the regulations under sections 6011 and 6071 will be effective on July 6, 2007. Transition relief is provided with respect to returns of section 4965 taxes due on or before October 4, 2007. These returns will be deemed timely if the return is filed and the tax paid before October 4, 2007. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to this notice of proposed rulemaking. It is hereby certified that the collection of information in § 301.6011(g)-1 will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601)

(RFA)is not required. The effect of these proposed regulations on small entities flows directly from the statutes these regulations implement. Section 6011(g), as amended by TIPRA, requires any taxable party to a prohibited tax shelter transaction to notify any tax-exempt entity which is a party to such transaction that the transaction is a prohibited tax shelter transaction. In implementing this statute, § 301.6011(g)-1 of the proposed regulations requires every taxable party to a prohibited tax shelter transaction (or a single taxable party acting by designation on behalf of other taxable parties) to provide to every tax-exempt entity that the taxable party knows or has reason to know is a party to the transaction a single statement disclosing that the transaction is a prohibited tax shelter transaction within 60 days after the last to occur:

(1)The date the taxable person becomes a taxable party to the transaction; or

(2)the date the taxable party knows or has reason to know that the tax-exempt entity is a party to the transaction. Moreover, it is unlikely that a significant number of small businesses will engage in transactions that are subject to disclosure under 301.6011(g). The IRS and the Treasury Department request comments concerning the likelihood that small businesses are engaging in transactions subject to disclosure under this provision. Pursuant to section 7805(f) of the Code, this regulation as been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any comments (a signed original and eight

(8)copies) that are submitted timely to the IRS at the address listed in the Addresses section of this document. The IRS and the Treasury Department specifically request comments on the clarity of the proposed rule and how it may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place will be published in the **Federal Register** . Drafting Information The principal authors of these regulations are Galina Kolomietz and Dana Barry, Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 53 Excise taxes, Foundations, Investments, Lobbying, Reporting and recordkeeping requirements. 26 CFR Part 54 Excise Taxes, Pensions, Reporting and recordkeeping requirements. 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR parts 1, 53, 54, and 301 are proposed to be amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.6033-5 is added to read as follows: § 1.6033-5 Disclosure by tax-exempt entities that are parties to certain reportable transactions. [The text of this section is the same as the text of § 1.6033-5T published elsewhere in this issue of the **Federal Register** ]. PART 53— FOUNDATION AND SIMILAR EXCISE TAXES **Par. 3** . The authority citation for part 53 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 4.** Sections 53.4965-1 through 53.4965-9 are added to read as follows: § 53.4965-1 Overview.

(a)*Entity-level excise tax.* Section 4965 imposes two excise taxes with respect to certain tax shelter transactions to which tax-exempt entities are parties. Section 4965(a)(1) imposes an entity-level excise tax on certain tax-exempt entities that are parties to “prohibited tax shelter transactions,” as defined in section 4965(e). See § 53.4965-2 for the discussion of covered tax-exempt entities. See § 53.4965-3 for the definition of prohibited tax shelter transactions. See § 53.4965-4 for the definition of tax-exempt party to a prohibited tax shelter transaction. The entity-level excise tax under section 4965(a)(1) is imposed on a specified percentage of the entity's net income or proceeds that are attributable to the transaction for the relevant tax year (or a period within that tax year). The rate of tax depends on whether the entity knew or had reason to know that the transaction was a prohibited tax shelter transaction at the time the entity became a party to the transaction. See § 53.4965-7(a) for the discussion of the entity-level excise tax under section 4965(a)(1). See § 53.4965-6 for the discussion of “knowing or having reason to know.” See § 53.4965-8 for the definition of net income and proceeds and the standard for allocating net income and proceeds that are attributable to a prohibited tax shelter transaction to various periods.

(b)*Manager-level excise tax.* Section 4965(a)(2) imposes a manager-level excise tax on “entity managers,” as defined in section 4965(d), of tax-exempt entities who approve the entity as a party (or otherwise cause the entity to be a party) to a prohibited tax shelter transaction and know or have reason to know, at the time the tax-exempt entity enters into the transaction, that the transaction is a prohibited tax shelter transaction. See § 53.4965-5 for the definition of entity manager and the meaning of “approving or otherwise causing,” and § 53.4965-6 for the discussion of “knowing or having reason to know.” See § 53.4965-7(b) for the discussion of the manager-level excise tax under section 4965(a)(2).

(c)*Effective/applicability dates.* See § 53.4965-9 for the discussion of the relevant effective dates. § 53.4965-2 Covered tax-exempt entities.

(a)*In general.* Under section 4965(c), the term “tax-exempt entity” refers to entities that are described in sections 501(c), 501(d), or 170(c) (other than the United States), Indian tribal governments (within the meaning of section 7701(a)(40)), and tax-qualified pension plans, individual retirement arrangements and similar tax-favored savings arrangements that are described in sections 4979(e)(1),

(2)or (3), 529, 457(b), or 4973(a). The tax-exempt entities referred to in section 4965(c) are divided into two broad categories, non-plan entities and plan entities.

(b)*Non-plan entities.* Non-plan entities are—

(1)Entities described in section 501(c);

(2)Religious or apostolic associations or corporations described in section 501(d);

(3)Entities described in section 170(c), including states, possessions of the United States, the District of Columbia, political subdivisions of states and political subdivisions of possessions of the United States (but not including the United States); and

(4)Indian tribal governments within the meaning of section 7701(a)(40).

(c)*Plan entities.* Plan entities are—

(1)Entities described in section 4979(e)(1) (qualified plans under section 401(a), including qualified cash or deferred arrangements under section 401(k) (including a section 401(k) plan that allows designated Roth contributions));

(2)Entities described in section 4979(e)(2) (annuity plans described in section 403(a));

(3)Entities described in section 4979(e)(3) (annuity contracts described in section 403(b), including a section 403(b) arrangement that allows Roth contributions);

(4)Qualified tuition programs described in section 529;

(5)Eligible deferred compensation plans under section 457(b) that are maintained by a governmental employer as defined in section 457(e)(1)(A);

(6)Arrangements described in section 4973(a) which include—

(i)Individual retirement plans defined in sections 408(a) and (b), including—

(A)Simplified employee pensions

(SEPs)under section 408(k);

(B)Simple individual retirement accounts (SIMPLEs) under section 408(p);

(C)Deemed individual retirement accounts or annuities

(IRAs)qualified under a qualified plan (deemed IRAs) under section 408(q)); and

(D)Roth IRAs under section 408A.

(ii)Arrangements described in section 220(d) (Archer Medical Savings Accounts (MSAs));

(iii)Arrangements described in section 403(b)(7) (custodial accounts treated as annuity contracts);

(iv)Arrangements described in section 530 (Coverdell education savings accounts); and

(v)Arrangements described in section 223(d) (health savings accounts (HSAs)). § 53.4965-3 Prohibited tax shelter transactions.

(a)*In general.* Under section 4965(e), the term *prohibited tax shelter transaction means* —

(1)Listed transactions within the meaning of section 6707A(c)(2), including subsequently listed transactions described in paragraph

(b)of this section; and

(2)Prohibited reportable transactions, which consist of the following reportable transactions within the meaning of section 6707A(c)(1)—

(i)Confidential transactions, as described in § 1.6011-4(b)(3) of this chapter; or

(ii)Transactions with contractual protection, as described in § 1.6011-4(b)(4) of this chapter.

(b)*Subsequently listed transactions.* A subsequently listed transaction for purposes of section 4965 is a transaction that is identified by the Secretary as a listed transaction after the tax-exempt entity has entered into the transaction and that was not a prohibited reportable transaction (within the meaning of section 4965(e)(1)(C) and paragraph (a)(2) of this section) at the time the entity entered into the transaction.

(c)*Cross-reference.* The determination of whether a transaction is a listed transaction or a prohibited reportable transaction for section 4965 purposes shall be made under the law applicable to section 6707A(c)(1) and (c)(2). § 53.4965-4 Definition of tax-exempt party to a prohibited tax shelter transaction.

(a)*In general.* For purposes of sections 4965 and 6033(a)(2), a tax-exempt entity is a party to a prohibited tax shelter transaction if the entity—

(1)Facilitates a prohibited tax shelter transaction by reason of its tax-exempt, tax indifferent or tax-favored status;

(2)Enters into a listed transaction and the tax-exempt entity's tax return (whether an original or an amended return) reflects a reduction or elimination of its liability for applicable Federal employment, excise or unrelated business income taxes that is derived directly or indirectly from tax consequences or tax strategy described in the published guidance that lists the transaction; or

(3)Is identified in published guidance, by type, class or role, as a party to a prohibited tax shelter transaction.

(b)Published guidance may identify which tax-exempt entities, by type, class or role, will not be treated as a party to a prohibited tax shelter transaction for purposes of sections 4965 and 6033(a)(2).

(c)*Examples.* The following examples illustrate the principles of this section: Example 1. A tax-exempt entity enters into a transaction (Transaction A) with an S corporation. Transaction A is the same as or substantially similar to the transaction identified by the Secretary as a listed transaction in Notice 2004-30 (2004-1 CB 828). The tax-exempt entity's role in Transaction A is similar to the role of the tax-exempt party, as described in Notice 2004-30. Under the terms of the transaction, as described in Notice 2004-30, the tax-exempt entity receives the S corporation stock and, due to the tax-exempt entity's tax-exempt status, aids the S corporation and its shareholders in avoiding taxable income. The tax-exempt entity facilitates Transaction A by reason of its tax-exempt, tax indifferent or tax-favored status. Accordingly, the tax-exempt entity is a party to Transaction A for purposes of sections 4965 and 6033(a)(2). See § 601.601(d)(2)(ii)( *b* ) of this chapter. Example 2. A tax-exempt entity is a partner in a partnership. The partnership has a number of other taxable and tax-exempt partners. The tax-exempt entity does not control the partnership. The partnership enters into a number of transactions, including a transaction (Transaction B) which is the same as or substantially similar to the transaction identified by the Secretary as a listed transaction in Notice 2002-35 (2002-1 CB 992) (as clarified and modified by Notice 2006-16 (2006-9 IRB 538). The partnership's role in Transaction B is similar to the role of T, as described in Notice 2002-35, that is, the role of the taxpayer claiming the tax benefits from the transaction. The tax-exempt entity's tax returns do not reflect a reduction or elimination of its liability for applicable Federal taxes as a result of Transaction B. The tax and economic consequences from Transaction B to the other partners are not dependent on the tax-exempt entity's tax-exempt, tax indifferent or tax-favored status. Accordingly, the tax-exempt entity does not facilitate Transaction B by reason of its tax-exempt, tax indifferent or tax-favored status. Because the tax-exempt entity's tax returns do not reflect a reduction or elimination of its liability for applicable Federal taxes that is derived directly or indirectly from tax consequences or tax strategy described in the published guidance that lists the transaction, the tax-exempt entity is not a party to Transaction B by reason of paragraph (a)(2) of this section. The tax-exempt entity also has not been identified, by type, class or role, as a party to a prohibited tax shelter transaction in published guidance. Therefore, the tax-exempt entity is not a party to Transaction B for purposes of sections 4965 and 6033(a)(2). See § 601.601(d)(2)(ii)( *b* ) of this chapter.

(d)*Effective/applicability dates.* See § 53.4965-9 for the discussion of the relevant applicability dates. § 53.4965-5 Entity managers and related definitions.

(a)*Entity manager of a non-plan entity* —(1) *In general.* Under section 4965(d)(1), an entity manager of a non-plan entity is—

(i)A person with the authority or responsibility similar to that exercised by an officer, director, or trustee of an organization (that is, the non-plan entity); and

(ii)With respect to any act, the person who has final authority or responsibility (either individually or as a member of a collective body) with respect to such act.

(2)*Definition of officer.* For purposes of paragraph (a)(1)(i) of this section, a person is considered to be an officer of the non-plan entity (or to have similar authority or responsibility) if the person—

(i)Is specifically designated as such under the certificate of incorporation, by-laws, or other constitutive documents of the non-plan entity; or

(ii)Regularly exercises general authority to make administrative or policy decisions on behalf of the non-plan entity.

(3)*Exception for acts requiring approval by a superior.* With respect to any act, any person is not described in paragraph (a)(2)(ii) of this section if the person has authority merely to recommend particular administrative or policy decisions, but not to implement them without approval of a superior.

(4)*Delegation of authority.* A person is an entity manager of a non-plan entity within the meaning of paragraph (a)(1)(ii) of this section if, with respect to any prohibited tax shelter transaction, such person has been delegated final authority or responsibility with respect to such transaction (including by transaction type or dollar amount) by a person described in paragraph (a)(1)(i) of this section or the governing board of the entity. For example, an investment manager is an entity manager with respect to a prohibited tax shelter transaction if the non-plan entity's governing body delegated to the investment manager the final authority to make certain investment decisions and, in the exercise of that authority, the manager committed the entity to the transaction. To be considered an entity manager of a non-plan entity within the meaning of paragraph (a)(1)(ii) of this section, a person need not be an employee of the entity. A person is not described in paragraph (a)(1)(ii) of this section if the person is merely implementing a decision made by a superior.

(b)*Entity manager of a plan entity* —(1) *In general.* Under section 4965(d)(2), an entity manager of a plan entity is the person who approves or otherwise causes the entity to be a party to the prohibited tax shelter transaction.

(2)*Special rule for plan participants and beneficiaries who have investment elections* —(i) *Fully self-directed plans or arrangements.* In the case of a fully self-directed qualified plan, IRA, or other savings arrangement (including the case where a plan participant or beneficiary is given a list of prohibited investments, such as collectibles), if the plan participant or beneficiary selected a certain investment and, therefore, approved the plan entity to become a party to a prohibited tax shelter transaction, the plan participant or the beneficiary is an entity manager.

(ii)*Plans or arrangements with limited investment options.* In the case of a qualified plan, IRA, or other savings arrangement where a plan participant or beneficiary is offered a limited number of investment options from which to choose, the person responsible for determining the pre-selected investment options is an entity manager and the plan participant or the beneficiary generally is not an entity manager.

(c)*Meaning of “approves or otherwise causes”* —(1) *In general.* A person is treated as approving or otherwise causing a tax-exempt entity to become a party to a prohibited tax shelter transaction if the person has the authority to commit the entity to the transaction, either individually or as a member of a collective body, and the person exercises that authority.

(2)*Collective bodies.* If a person shares the authority described in paragraph (c)(1) of this section as a member of a collective body (for example, board of trustees or committee), the person will be considered to have exercised such authority if the person voted in favor of the entity becoming a party to the transaction. However, a member of the collective body will not be treated as having exercised the authority described in paragraph (c)(1) of this section if he or she voted against a resolution that constituted approval or an act that caused the tax-exempt entity to be a party to a prohibited tax shelter transaction, abstained from voting for such approval, or otherwise failed to vote in favor of such approval.

(3)*Exceptions* —(i) *Successor in interest.* If a tax-exempt entity that is a party to a prohibited tax shelter transaction is dissolved, liquidated, or merged into a successor entity, an entity manager of the successor entity will not, solely by reason of the reorganization, be treated as approving or otherwise causing the successor entity to become a party to a prohibited tax shelter transaction, provided that the reorganization of the tax-exempt entity does not result in a material change to the terms of the transaction. For purposes of this paragraph a material change includes an extension or renewal of the agreement (other than an extension or renewal that results from another party to the transaction unilaterally exercising an option granted by the agreement) or a more than incidental change to any payment under the agreement. A change for the sole purpose of substituting the successor entity for the original tax-exempt party is not a material change.

(ii)*Exercise or nonexercise of options.* Nonexercise of an option pursuant to a transaction involving the tax-exempt entity generally will not constitute an act of approving or causing the entity to be a party to the transaction. If, pursuant to a transaction involving the tax-exempt entity, the entity manager exercises an option (such as a repurchase option), the entity manager will not be subject to the entity manager-level tax if the exercise of the option does not result in the tax-exempt entity becoming a party to a second transaction that is a prohibited tax shelter transaction.

(4)*Example.* The following example illustrates the principles of paragraph (c)(3)(ii) of this section: *Example.* In a sale-in, lease-out

(SILO)transaction described in Notice 2005-13 (2005-9 IRB 630), X, which is a non-plan entity, has purported to sell property to Y, a taxable entity and lease it back for a term of years. At the end of the basic lease term, X has the option of “repurchasing” the property from Y for a predetermined purchase price, with funds that have been set aside at the inception of the transaction for that purpose. The entity manager, by deciding to exercise or not exercise the “repurchase” option is not approving or otherwise causing the non-plan entity to become a party to a second prohibited tax shelter transaction. See § 601.601(d)(2)(ii)( *b* ) of this chapter.

(5)*Coordination with the reason-to-know standard.* The determination that an entity manager approved or caused a tax-exempt entity to be a party to a prohibited tax shelter transaction, by itself, does not establish liability for the section 4965(a)(2) tax. For rules on determining whether an entity manager knew or had reason to know that the transaction was a prohibited tax shelter transaction, see § 53.4965-6(b).

(d)*Effective/applicability dates.* See § 53.4965-9 for the discussion of the relevant applicability dates. § 53.4965-6 Meaning of “knows or has reason to know.”

(a)*Attribution to the entity.* An entity will be treated as knowing or having reason to know for section 4965 purposes if one or more of its entity managers knew or had reason to know that the transaction was a prohibited tax shelter transaction at the time the entity manager(s) approved the entity as (or otherwise caused the entity to be) a party to the transaction. The entity shall be attributed the knowledge or reason to know of any entity manager described in § 53.4965-5(a)(1)(i) even if that entity manager does not approve the entity as (or otherwise cause the entity to be) a party to the transaction.

(b)*Determining whether an entity manager knew or had reason to know* —(1) *In general.* Whether an entity manager knew or had reason to know that a transaction is a prohibited tax shelter transaction is based on all facts and circumstances. In order for an entity manager to know or have reason to know that a transaction is a prohibited tax shelter transaction, the entity manager must have knowledge of sufficient facts that would lead a reasonable person to conclude that the transaction is a prohibited tax shelter transaction. An entity manager will be considered to have “reason to know” if a reasonable person in the entity manager's circumstances would conclude that the transaction was a prohibited tax shelter transaction based on all the facts reasonably available to the manager at the time of approving the entity as (or otherwise causing the entity to be) a party to the transaction. Factors that will be considered in determining whether a reasonable person in the entity manager's circumstances would conclude that the transaction was a prohibited tax shelter transaction include, but are not limited to—

(i)The presence of tax shelter indicia (see paragraph (b)(2) of this section);

(ii)Whether the entity manager received a disclosure statement prior to the consummation of the transaction indicating that the transaction may be a prohibited tax shelter transaction (see paragraph (b)(3) of this section); and

(iii)Whether the entity manager made appropriate inquiries into the transaction (see paragraph (b)(4) of this section).

(2)*Tax-shelter indicia.* The presence of indicia that a transaction is a tax shelter will be treated as an indication that the entity manager knew or had reason to know that the transaction was a prohibited tax shelter transaction. Tax shelter indicia include but are not limited to—

(i)The transaction is extraordinary for the entity considering prior investment activity;

(ii)The transaction promises an economic return for the organization that is exceptional considering the amount invested by, the participation of, or the absence of risk to the organization; or

(iii)The transaction is of significant size relative to the receipts of the entity.

(3)*Effect of disclosure statements.* Receipt by an entity manager of a statement, including a statement described in section 6011(g), in advance of a transaction that the transaction may be a prohibited tax shelter transaction (or a statement that a partnership, hedge fund or other investment conduit may engage in a prohibited tax shelter transaction in the future) is a factor relevant in the determination of whether the entity manager knew or had reason to know that the transaction is a prohibited transaction. However, an entity manager will not be treated as knowing or having reason to know that the transaction was a prohibited tax shelter transaction solely because the entity manager receives such a disclosure.

(4)*Appropriate inquiries.* What inquiries are appropriate will be determined from the facts and circumstances of each case. For example, if one or more tax shelter indicia are present or if an entity manager receives a disclosure statement described in paragraph (b)(3) of this section, an entity manager has a responsibility to inquire further whether the transaction is a prohibited tax shelter transaction.

(c)*Reliance on professional advice* —(1) *In general.* An entity manager is not required to obtain the advice of a professional tax advisor to establish that the entity manager made appropriate inquiries. Moreover, not seeking professional advice, by itself, shall not give rise to an inference that the entity manager had reason to know that a transaction is a prohibited tax shelter transaction.

(2)*Reliance on written opinion of professional tax advisor.* An entity manager may establish that he or she did not have a reason to know that a transaction was a prohibited tax shelter transaction at the time the tax-exempt entity entered into the transaction if the entity manager reasonably, and in good faith, relied on the written opinion of a professional tax advisor. Reliance on the written opinion of a professional tax advisor establishes that the entity manager did not have reason to know if, taking into account all the facts and circumstances, the reliance was reasonable and the entity manager acted in good faith. For example, the entity manager's education, sophistication, and business experience will be relevant in determining whether the reliance was reasonable and made in good faith. In no event will an entity manager be considered to have reasonably relied in good faith on an opinion unless the requirements of this paragraph (c)(2) are satisfied. The fact that these requirements are satisfied, however, will not necessarily establish that the entity manager reasonably relied on the opinion in good faith. For example, reliance may not be reasonable or in good faith if the entity manager knew, or reasonably should have known, that the advisor lacked knowledge in the relevant aspects of Federal tax law.

(i)*All facts and circumstances considered.* The advice must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. The requirements of this paragraph (c)(2) are not satisfied if the entity manager fails to disclose a fact that it knows, or reasonably should know, is relevant to determining whether the transaction is a prohibited tax shelter transaction.

(ii)*No unreasonable assumptions.* The advice must not be based on unreasonable factual or legal assumptions (including assumptions as to future events) and must not unreasonably rely on the representations, statements, findings, or agreements of the entity manager or any other person (including another party to the transaction or a material advisor within the meaning of sections 6111 and 6112).

(iii)*“More likely than not” opinion.* The written opinion of the professional tax advisor must apply the appropriate law to the facts and, based on this analysis, must conclude that the transaction was not a prohibited tax shelter transaction at a “more likely than not” level of certainty at the time the entity manager approved the entity (or otherwise caused the entity) to be a party to the transaction.

(3)*Special rule.* An entity manager's reliance on a written opinion of a professional tax advisor will not be considered reasonable if the advisor is, or is related to a person who is, a material advisor with respect to the transaction within the meaning of sections 6111 and 6112.

(d)*Subsequently listed transactions.* An entity manager will not be treated as knowing or having reason to know that a transaction (other than a prohibited reportable transaction as defined in section 4965(e)(1)(C) and § 53.4965-3(a)(2)) is a prohibited tax shelter transaction if the entity enters into the transaction before the date on which the transaction is identified by the Secretary as a listed transaction.

(e)*Effective/applicability dates.* See § 53.4965-9 for the discussion of the relevant applicability dates. § 53.4965-7 Taxes on prohibited tax shelter transactions.

(a)*Entity-level taxes* —(1) *In general.* Entity-level excise taxes apply to non-plan entities (as defined in § 53.4965-2(b)) that are parties to prohibited tax shelter transactions.

(i)*Prohibited tax shelter transactions other than subsequently listed transactions* —(A) *Amount of tax if the entity did not know and did not have reason to know.* If the tax-exempt entity did not know and did not have reason to know that the transaction was a prohibited tax shelter transaction at the time the entity entered into the transaction, the tax is the highest rate of tax under section 11 multiplied by the greater of— ( *1* ) The entity's net income with respect to the prohibited tax shelter transaction (after taking into account any tax imposed by Subtitle D, other than by this section, with respect to such transaction) for the taxable year; or ( *2* ) 75 percent of the proceeds received by the entity for the taxable year that are attributable to such transaction.

(B)*Amount of tax if the entity knew or had reason to know.* If the tax-exempt entity knew or had reason to know that the transaction was a prohibited tax shelter transaction at the time the entity entered into the transaction, the tax is the greater of— ( *1* ) 100 percent of the entity's net income with respect to the transaction (after taking into account any tax imposed by Subtitle D, other than by this section, with respect to such transaction) for the taxable year; or ( *2* ) 75 percent of the proceeds received by the entity for the taxable year that are attributable to such transaction.

(ii)*Subsequently listed transactions* —(A) *In general.* In the case of a subsequently listed transaction (as defined in section 4965(e)(2) and § 53.4965-3(b)), the tax-exempt entity's income and proceeds attributable to the transaction are allocated between the period before the transaction became listed and the period beginning on the date the transaction became listed. See § 53.4965-8 for the standard for allocating net income or proceeds to various periods. The tax for each taxable year is the highest rate of tax under section 11 multiplied by the greater of— ( *1* ) The entity's net income with respect to the subsequently listed transaction (after taking into account any tax imposed by Subtitle D, other than by this section, with respect to such transaction) for the taxable year that is allocable to the period beginning on the later of the date such transaction is identified by the Secretary as a listed transaction or the first day of the taxable year; or ( *2* ) 75 percent of the proceeds received by the entity for the taxable year that are attributable to such transaction and allocable to the period beginning on the later of the date such transaction is identified by the Secretary as a listed transaction or the first day of the taxable year.

(B)*No increase in tax.* The 100 percent tax under section 4965(b)(1)(B) and § 53.4965-7(a)(1)(i)(B) does not apply to any subsequently listed transaction (as defined in section 4965(e)(2) and § 53.4965-3(b)) entered into by a tax-exempt entity before the date on which the transaction is identified by the Secretary as a listed transaction.

(2)*Taxable year.* The excise tax imposed under section 4965(a)(1) applies for the taxable year in which the entity becomes a party to the prohibited tax shelter transaction and any subsequent taxable year for which the entity has net income or proceeds attributable to the transaction. A taxable year for tax-exempt entities is the calendar year or fiscal year, as applicable, depending on the basis on which the tax-exempt entity keeps its books for Federal income tax purposes. If a tax-exempt entity has not established a taxable year for Federal income tax purposes, the entity's taxable year for the purpose of determining the amount and timing of net income and proceeds attributable to a prohibited tax shelter transaction will be deemed to be the annual period the entity uses in keeping its books and records.

(b)*Manager-level taxes* —(1) *Amount of tax.* If any entity manager approved or otherwise caused the tax-exempt entity to become a party to a prohibited tax shelter transaction and knew or had reason to know that the transaction was a prohibited tax shelter transaction, such entity manager is liable for the $20,000 tax. See § 53.4965-5(d) for the meaning of approved or otherwise caused. See § 53.4965-6 for the meaning of knew or had reason to know.

(2)*Timing of the entity manager tax.* If a tax-exempt entity enters into a prohibited tax shelter transaction during a taxable year of an entity manager, then the entity manager that approved or otherwise caused the tax-exempt entity to become a party to the transaction is liable for the entity manager tax for that taxable year if the entity manager knew or had reason to know that the transaction was a prohibited tax shelter transaction.

(3)*Example.* The application of paragraph (b)(2) of this section is illustrated by the following example: *Example.* The entity manager's taxable year is the calendar year. On December 1, 2006, the entity manager approved or otherwise caused the tax-exempt entity to become a party to a transaction that the entity manager knew or had reason to know was a prohibited tax shelter transaction. The tax-exempt entity entered into the transaction on January 31, 2007. The entity manager is liable for the entity manager level tax for the entity manager's 2007 taxable year, during which the tax-exempt entity entered into the prohibited tax shelter transaction.

(4)*Separate liability.* If more than one entity manager approved or caused a tax-exempt entity to become a party to a prohibited tax shelter transaction while knowing (or having reason to know) that the transaction was a prohibited tax shelter transaction, then each such entity manager is separately (that is, not jointly and severally) liable for the entity manager-level tax with respect to the transaction.

(c)*Effective dates.* See § 53.4965-9 for the discussion of the relevant effective dates. § 53.4965-8 Definition of net income and proceeds and standard for allocating net income or proceeds to various periods.

(a)*In general.* For purposes of section 4965(a), the amount and the timing of the net income and proceeds attributable to the prohibited tax shelter transaction will be computed in a manner consistent with the substance of the transaction. In determining the substance of listed transactions, the IRS will look to, among other items, the listing guidance and any subsequent guidance published in the Internal Revenue Bulletin relating to the transaction.

(b)*Definition of net income and proceeds* —(1) *Net income* . A tax-exempt entity's net income attributable to a prohibited tax shelter transaction is its gross income derived from the transaction reduced by those deductions that are attributable to the transaction and that would be allowed by chapter 1 of the Internal Revenue Code if the tax-exempt entity were treated as a taxable entity for this purpose, and further reduced by taxes imposed by Subtitle D, other than by this section, with respect to the transaction.

(2)*Proceeds* —(i) *Tax-exempt entities that facilitate the transaction by reason of their tax-exempt, tax indifferent or tax-favored status.* Solely for purposes of section 4965, in the case of a tax-exempt entity that is a party to the transaction by reason of § 53.4965-4(a)(1) of this chapter, the term *proceeds* means the gross amount of the tax-exempt entity's consideration for facilitating the transaction, not reduced for any costs or expenses attributable to the transaction. Published guidance with respect to a particular prohibited tax shelter transaction may designate additional amounts as proceeds from the transaction for section 4965 purposes.

(ii)*Tax-exempt entities that enter into transactions to reduce or eliminate their liability for applicable Federal taxes.* For purposes of section 4965, in the case of a tax-exempt entity that is a party to the transaction by reason of § 53.4965-4(a)(2) of this chapter, the term *proceeds* means tax savings purportedly generated by the transaction and claimed by the tax-exempt entity on its tax return with respect to the tax year. Published guidance with respect to a particular prohibited tax shelter transaction may designate additional amounts as proceeds from the transaction for section 4965 purposes.

(iii)*Treatment of gifts and contributions.* To the extent not otherwise included in the definition of proceeds in paragraphs (b)(2)(i) and

(ii)of this section, any amount that is a gift or a contribution to a tax-exempt entity and is attributable to a prohibited tax shelter transaction will be treated as proceeds for section 4965 purposes, unreduced by any associated expenses.

(c)*Allocation of net income and proceeds* —(1) *In general.* For purposes of section 4965(a), the net income and proceeds attributable to a prohibited tax shelter transaction must be allocated in a manner consistent with the tax-exempt entity's established method of accounting for Federal income tax purposes. If the tax-exempt entity has not established a method of accounting for Federal income tax purposes, solely for purposes of section 4965(a) the tax-exempt entity must use the cash receipts and disbursements method of accounting (cash method) provided for in section 446 of the Internal Revenue Code to determine the amount and timing of net income and proceeds attributable to a prohibited tax shelter transaction.

(2)*Special rule.* If a tax-exempt entity has established a method of accounting other than the cash method, the tax-exempt entity may nevertheless use the cash method of accounting to determine the amount of the net income and proceeds—

(i)Attributable to a prohibited tax shelter transaction entered into prior to the effective date of section 4965(a) tax and allocable to pre- and post-effective date periods; or

(ii)Attributable to a subsequently listed transaction and allocable to pre- and post-listing periods.

(d)*Transition year rules* . In the case of the taxable year that includes August 16, 2006 (the transition year), the IRS will treat the period beginning on the first day of the transition year and ending on August 15, 2006, and the period beginning on August 16, 2006, and ending on the last day of the transition year as short taxable years. This treatment is solely for purposes of allocating net income or proceeds under section 4965. The tax-exempt entity continues to file tax returns for the full taxable year, does not file tax returns with respect to these deemed short taxable years and does not otherwise take the short taxable years into account for Federal tax purposes. Accordingly, the net income or proceeds that are properly allocated to the transition year in accordance with this section will be treated as allocable to the period—

(1)Ending on or before August 15, 2006 (and accordingly not subject to tax under section 4965(a)) to the extent such net income or proceeds would have been properly taken into account in accordance with this section by the tax-exempt entity in the deemed short year ending on August 15, 2006; and

(2)Beginning after August 15, 2006 (and accordingly subject to tax under section 4965(a)) to the extent such income or proceeds would have been properly taken into account in accordance with this section by the tax-exempt entity in the short year beginning August 16, 2006.

(e)*Allocation to pre- and post-listing periods.* If a transaction (other than a prohibited reportable transaction (as defined in section 4965(e)(1)(C) and § 53.4965-3(a)(2)) to which the tax-exempt entity is a party is subsequently identified in published guidance as a listed transaction during a taxable year of the entity (the listing year) in which it has net income or proceeds attributable to the transaction, the net income or proceeds are allocated between the pre- and post-listing periods. The IRS will treat the period beginning on the first day of the listing year and ending on the day immediately preceding the date of the listing, and the period beginning on the date of the listing and ending on the last day of the listing year as short taxable years. This treatment is solely for purposes of allocating net income or proceeds under section 4965. The tax-exempt entity continues to file tax returns for the full taxable year, does not file tax returns with respect to these deemed short taxable years and does not otherwise take the short taxable years into account for Federal tax purposes. Accordingly, the net income or proceeds that are properly allocated to the listing year in accordance with this section will be treated as allocable to the period—

(1)Ending before the date of the listing (and accordingly not subject to tax under section 4965(a)) to the extent such net income or proceeds would have been properly taken into account in accordance with this section by the tax-exempt entity in the deemed short year ending on the day immediately preceding the date of the listing; and

(2)Beginning on the date of the listing (and accordingly subject to tax under section 4965(a)) to the extent such income or proceeds would have been properly taken into account in accordance with this section by the tax-exempt entity in the short year beginning on the date of the listing.

(f)*Examples.* The following examples illustrate the allocation rules of this section: Example 1.

(i)In 1999, X, a calendar year non-plan entity using the cash method of accounting, entered into a lease-in/lease-out transaction

(LILO)substantially similar to the transaction described in Notice 2000-15 (2000-1 CB 826) (describing Rev. Rul. 99-14 (1999-1 CB 835), superseded by Rev. Rul. 2002-69 (2002-2 CB 760)). In 1999, X purported to lease property to Y pursuant to a “head lease,” and Y purported to lease the property back to X pursuant to a “sublease” of a shorter term. In form, X received $268M as an advance payment of head lease rent. Of this amount, $200M had been, in form, financed by a nonrecourse loan obtained by Y. X deposited the $200M with a “debt payment undertaker.” This served to defease both a portion of X's rent obligation under its sublease and Y's repayment obligation under the nonrecourse loan. Of the remainder of the $268M advance head lease rent payment, X deposited $54M with an “equity payment undertaker.” This served to defease the remainder of X's rent obligation under the sublease as well as the exercise price of X's end-of-sublease term purchase option. This amount inures to the benefit of Y and enables Y to recover its investment in the transaction and a return on that investment. In substance, the $54M is a loan from Y to X. X retained the remaining $14M of the advance head lease rent payment. In substance, this represents a fee for X's participation in the transaction. See § 601.601(d)(2)(ii)(b) of this chapter.

(ii)According to the substance of the transaction, the head lease, sublease and nonrecourse debt will be ignored for Federal income tax purposes. Therefore, any net income or proceeds resulting from these elements of the transaction will not be considered net income or proceeds attributable to the LILO transaction for purposes of section 4965(a). The $54M deemed loan from Y to X and the $14M fee are not ignored for Federal income tax purposes.

(iii)Under X's established cash basis method of accounting, any net income received in 1999 and attributable to the LILO transaction is allocated to X's December 31, 1999, tax year for purposes of section 4965. The $14M fee received in 1999, and which constitutes proceeds of the transaction, is likewise allocated to that tax year. Because the 1999 tax year is before the effective date of the section 4965 tax, X will not be subject to any excise tax under section 4965 for the amounts received in 1999.

(iv)Any earnings on the amount deposited with the equity payment undertaker that constitute gross income to X will be reduced by X's original issue discount deductions with respect to the deemed loan from Y, in determining X's net income from the transaction. Example 2. B, a non-plan entity using the cash method of accounting, has an annual accounting period that ends on December 31, 2006. B entered into a prohibited tax shelter transaction on March 15, 2006. On that date, B received a payment of $600,000 as a fee for its involvement in the transaction. B received no other proceeds or income attributable to this transaction in 2006. Under B's method of accounting, the payment received by B on March 15, 2006, is taken into account in the deemed short year ending on August 15, 2006. Accordingly, solely for purposes of section 4965, the payment is treated as allocable solely to the period ending on or before August 15, 2006, and is not subject to the excise tax imposed by section 4965(a). Example 3. The facts are the same as in *Example 2* , except that B received an additional payment of $400,000 on September 30, 2006. Under B's method of accounting, the payment received by B on September 30, 2006, is taken into account in the deemed short year beginning on August 16, 2006. Accordingly, solely for purposes of section 4965, the $400,000 payment is treated as allocable to the period beginning after August 15, 2006, and is subject to the excise tax imposed by section 4965(a). Example 4. C, a non-plan entity using the cash method of accounting, has an annual accounting period that ends on December 31. C entered into a prohibited tax shelter transaction on May 1, 2005. On March 15, 2007, C received a payment of $580,000 attributable to the transaction. On June 1, 2007, the transaction is identified by the IRS in published guidance as a listed transaction. On June 15, 2007, C received an additional payment of $400,000 attributable to the transaction. Under C's method of accounting, the payments received on March 15, 2007, and June 15, 2007, are taken into account in 2007. The IRS will treat the period beginning on January 1, 2007, and ending on May 31, 2007, and the period beginning on June 1, 2007, and ending on December 31, 2007, as short taxable years. The payment received by C on March 15, 2007, is taken into account in the deemed short year ending on May 31, 2007. Accordingly, solely for purposes of section 4965, the payment is treated as allocable solely to the pre-listing period, and is not subject to the excise tax imposed by section 4965(a). The payment received by C on June 15, 2007, is taken into account in the deemed short year beginning on June 1, 2007. Accordingly, solely for purposes of section 4965, the payment is treated as allocable to the post-listing period, and is subject to the excise tax imposed by section 4965(a).

(g)*Effective/applicability dates.* See § 53.4965-9 for the discussion of the relevant applicability dates. § 53.4965-9 Effective/applicability dates.

(a)*In general.* The taxes under section 4965(a) and § 53.4965-7 are effective for taxable years ending after May 17, 2006, with respect to transactions entered into before, on or after that date, except that no tax under section 4965(a) applies with respect to income or proceeds that are properly allocable to any period ending on or before August 15, 2006.

(b)*Applicability of the regulations* . Except as provided in paragraph

(c)of this section, upon publication of final regulations, §§ 53.4965-1 through 53.4965-8 of this chapter will apply to taxable years ending after July 6, 2007. A tax-exempt entity may rely on the provisions of §§ 53.4965-1 through 53.4965-8 for taxable years ending on or before July 6, 2007.

(c)*Effective date with respect to certain knowing transactions* —(1) *Entity-level tax.* The 100 percent tax under section 4965(b)(1)(B) and § 53.4965-7(a)(1)(i)(B) does not apply to prohibited tax shelter transactions entered into by a tax-exempt entity on or before May 17, 2006.

(2)*Manager-level tax.* The IRS will not assert that an entity manager who approved or caused a tax-exempt entity to become a party to a prohibited tax shelter transaction is liable for the entity manager tax under section 4965(b)(2) and § 53.4965-7(b)(1) with respect to the transaction if the tax-exempt entity entered into such transaction prior to May 17, 2006. **Par. 5.** In § 53.6071-1, paragraphs

(g)and

(h)are added to read as follows: § 53.6071-1 Time for filing returns.

(g)[The text of the proposed amendment to § 53.6071-1(g) is the same as the text of § 53.6071-1T(g) published elsewhere in this issue of the **Federal Register** ].

(h)[The text of the proposed amendment to § 53.6071-1(h) is the same as the text of § 53.6071-1T(h) published elsewhere in this issue of the **Federal Register** ]. PART 54—EXCISE TAXES, PENSIONS, REPORTING AND RECORDKEEPING REQUIREMENTS **Par. 6.** The authority citation for part 54 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 7.** In § 54.6011-1, paragraphs

(c)and

(d)are added to read as follows: § 54.6011-1 General requirement of return, statement or list.

(c)[The text of the proposed amendment to § 54.6011-1(c) is the same as the text of § 54.6011-1T(c) published elsewhere in this issue of the **Federal Register** ].

(d)[The text of the proposed amendment to § 54.6011-1(d) is the same as the text of § 54.6011-1T(d) published elsewhere in this issue of the **Federal Register** ]. PART 301—PROCEDURE AND ADMINISTRATION **Par. 8.** The authority citation for part 301 continues to read, part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 9.** Section 301.6011(g)-1 is added to read as follows: § 301.6011(g)-1 Disclosure by taxable party to the tax-exempt entity.

(a)*Requirement of disclosure* —(1) *In general.* Except as provided in paragraph (d)(2) of this section, any taxable party (as defined in paragraph

(c)of this section) to a prohibited tax shelter transaction (as defined in section 4965(e) and § 53.4965-3 of this chapter) must disclose by statement to each tax-exempt entity (as defined in section 4965(c) and § 53.4965-2 of this chapter) that the taxable party knows or has reason to know is a party to such transaction (as defined in paragraph

(b)of this section) that the transaction is a prohibited tax shelter transaction.

(2)*Determining whether a taxable party knows or has reason to know.* Whether a taxable party knows or has reason to know that a tax-exempt entity is a party to a prohibited tax shelter transaction is based on all the facts and circumstances. If the taxable party knows or has reason to know that a prohibited tax shelter transaction involves a tax-exempt, tax indifferent or tax-favored entity, relevant factors for determining whether the taxable party knows or has reason to know that a specific tax-exempt entity is a party to the transaction include—

(i)The extent of the efforts made to determine whether a tax-exempt entity is facilitating the transaction by reason of its tax-exempt, tax-indifferent or tax-favored status (or is identified in published guidance, by type, class or role, as a party to the transaction); and

(ii)If a tax-exempt entity is facilitating the transaction by reason of its tax-exempt, tax-indifferent or tax-favored status (or is identified in published guidance, by type, class or role, as a party to the transaction), the extent of the efforts made to determine the identity of the tax-exempt entity.

(b)*Definition of tax-exempt party to a prohibited tax shelter transaction* —(1) *In general.* For purposes of section 6011(g), a tax-exempt entity is a party to a prohibited tax shelter transaction if the entity—

(i)Facilitates a prohibited tax shelter transaction by reason of its tax-exempt, tax indifferent or tax-favored status; or

(ii)Is identified in published guidance, by type, class or role, as a party to a prohibited tax shelter transaction.

(2)Published guidance may identify which tax-exempt entities, by type, class or role, will not be treated as a party to a prohibited tax shelter transaction for purposes of section 6011(g).

(c)*Definition of taxable party* —(1) *In general.* For purposes of this section, the term *taxable party* means—

(i)A person who has entered into and participates or expects to participate in the transaction under §§ 1.6011-4(c)(3)(i)(A), (B), or (C), 20.6011-4, 25.6011-4, 31.6011-4, 53.6011-4, 54.6011-4, or 56.6011-4 of this chapter; or

(ii)A person who is designated as a taxable party by the Secretary in published guidance.

(2)*Special rules* —(i) *Certain listed transactions.* If a transaction that was otherwise not a prohibited tax shelter transaction becomes a listed transaction after the filing of a person's tax return (including an amended return) reflecting either tax consequences or a tax strategy described in the published guidance listing the transaction (or a tax benefit derived from tax consequences or a tax strategy described in the published guidance listing the transaction), the person is a taxable party beginning on the date the transaction is described as a listed transaction in published guidance.

(ii)*Persons designated as non-parties.* Published guidance may identify which persons, by type, class or role, will not be treated as a party to a prohibited tax shelter transaction for purposes of section 6011(g).

(d)*Time for providing disclosure statement* —(1) *In general.* A taxable party to a prohibited tax shelter transaction must make the disclosure required by this section to each tax-exempt entity that the taxable party knows or has reason to know is a party to the transaction within 60 days after the last to occur of—

(i)The date the person becomes a taxable party to the transaction within the meaning of paragraph

(c)of this section; or

(ii)The date the taxable party knows or has reason to know that the tax-exempt entity is a party to the transaction within the meaning of paragraph

(b)of this section.

(2)*Termination of a disclosure obligation.* A person shall not be required to provide the disclosure otherwise required by this section if the person does not know or have reason to know that the tax-exempt entity is a party to the transaction within the meaning of paragraph

(b)of this section on or before the first date on which the transaction is required to be disclosed by the person under §§ 1.6011-4, 20.6011-4, 25.6011-4, 31.6011-4, 53.6011-4, 54.6011-4, or 56.6011-4 of this chapter.

(3)Disclosure is not required with respect to any prohibited tax shelter transaction entered into by a tax-exempt entity on or before May 17, 2006.

(e)*Frequency of disclosure.* One disclosure statement is required per tax-exempt entity per transaction. See paragraph

(h)of this section for rules relating to designation agreements.

(f)*Form and content of disclosure statement.* The statement disclosing to the tax-exempt entity that the transaction is a prohibited tax shelter transaction must be a written statement that—

(1)Identifies the type of prohibited tax shelter transaction (including the published guidance citation for a listed transaction); and

(2)States that the tax-exempt entity's involvement in the transaction may subject either it or its entity manager(s) or both to excise taxes under section 4965 and to disclosure obligations under section 6033(a) of the Internal Revenue Code.

(g)*To whom disclosure is made.* The disclosure statement must be provided—

(1)In the case of a non-plan entity as defined in § 53.4965-2(b) of this chapter, to—

(i)Any entity manager of the tax-exempt entity with authority or responsibility similar to that exercised by an officer, director or trustee of an organization; or

(ii)If a person described in paragraph (g)(1)(i) of this section is not known, to the primary contact on the transaction.

(2)In the case of a plan entity as defined in § 53.4965-2(c) of this chapter, including a fully self-directed qualified plan, IRA, or other savings arrangement, to any entity manager of the plan entity who approved or otherwise caused the entity to become a party to the prohibited tax shelter transaction.

(h)*Designation agreements.* If more than one taxable party is required to disclose a prohibited tax shelter transaction under this section, the taxable parties may designate by written agreement a single taxable party to disclose the transaction. The transaction must then be disclosed in accordance with this section. The designation of one taxable party to disclose the transaction does not relieve the other taxable parties of their obligation to disclose the transaction to a tax-exempt entity that is a party to the transaction in accordance with this section, if the designated taxable party fails to disclose the transaction to the tax-exempt entity in a timely manner.

(i)*Penalty for failure to provide disclosure statement.* See section 6707A for penalties applicable to failure to disclose a prohibited tax shelter transaction in accordance with this section.

(j)*Effective/applicability date.* This section will apply with respect to transactions entered into by a tax-exempt entity after May 17, 2006. **Par. 11.** Section 301.6033-5 is added to read as follows: § 301.6033-5 Disclosure by tax-exempt entities that are parties to certain reportable transactions. [The text of this section is the same as the text of § 301.6033-5T published elsewhere in this issue of the **Federal Register** ]. Kevin M. Brown, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-12902 Filed 7-5-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 17 RIN 1018-AU53 Endangered and Threatened Wildlife and Plants; Designating the Northern Rocky Mountain Population of Gray Wolf as a Distinct Population Segment and Removing This Distinct Population Segment From the Federal List of Endangered and Threatened Wildlife AGENCY: Fish and Wildlife Service, Interior. ACTION: Proposed rule; reopening of comment period; notice of public hearing. SUMMARY: The U.S. Fish and Wildlife Service (Service, we or us) announces the reopening of the comment period for the proposed rule to establish a distinct population segment

(DPS)of the gray wolf ( *Canis lupis* ) in the Northern Rocky Mountains

(NRM)of the United States and to remove the gray wolf in the NRM DPS from the List of Endangered and Threatened Wildlife under the Endangered Species Act of 1973, as amended (Act). The State of Wyoming has a new statute and has advised the Service that it is appropriate to analyze a new draft wolf management plan that the Service believes could allow the wolves in northwestern Wyoming outside the National Parks to be removed from the protections of the Act. We are reopening the proposal's comment period to ensure that the public has full access to, and an opportunity to comment on, the proposed rule in light of this new information. We also announce the location and time of an additional public hearing to receive public comments on the proposal in light of the new information. If you have previously submitted comments, please do not resubmit them because we have already incorporated them in the public record and will fully consider them in our final decision. DATES: The public comment period is reopened until August 6, 2007. We may not consider any comments we receive after the closing date. We will hold a public hearing on this proposed rule on July 17, 2007. For more information, see “Public Hearing and Comments” below. Public Hearing An open house (a brief presentation about the proposed rule and revised plan with a question and answer period) will be held from 4:30 p.m. to 5:30 p.m., and will be followed by a public hearing from 5:30 p.m. to 8:30 p.m., on July 17, 2007, at the Cody Auditorium Facility, 1240 Beck Avenue, Cody, WY 82414. ADDRESSES: If you wish to comment, you may submit comments and materials concerning this proposal, identified by “RIN number 1018-AU53,” by any of the following methods: 1. You may submit comments through the Federal e-Rulemaking Portal at *http://www.regulations.gov* . Follow the instructions for submitting comments. 2. You may send comments by electronic mail (email) directly to the Service at *WesternGrayWolf@fws.gov* . Include “RIN number 1018-AU53” in the subject line of the message. 3. You may mail or hand-deliver comments to the U.S. Fish and Wildlife Service, Western Gray Wolf Recovery Coordinator, 585 Shepard Way, Helena, MT 59601. Comments and materials received, as well as supporting documentation used in preparation of this proposed action, will be available for inspection following the close of the comment period, by appointment, during normal business hours, at our Helena office at the address above. FOR FURTHER INFORMATION CONTACT: Edward E. Bangs, Western Gray Wolf Recovery Coordinator, U.S. Fish and Wildlife Service, at our Helena office (see ADDRESSES ) or telephone

(406)449-5225, extension 204. Persons who use a Telecommunications Device for the Deaf may call the Federal Information Relay Service at

(800)877-8339, 24 hours a day, 7 days a week. SUPPLEMENTARY INFORMATION: Background On February 8, 2007, we published a proposal to establish a DPS of the gray wolf in the NRM of the United States and to remove the NRM DPS from the List of Threatened and Endangered Wildlife (72 FR 6106) if Wyoming adopted a state law and management plan that adequately conserved wolves. The initial comment period on this proposal was open from February 8, 2007 to April 9, 2007. Due to the complexity of this proposed action, we extended the comment period to May 9, 2007 to allow the public ample opportunity to comment (72 FR 14760; March 29, 2007). At the time of this proposal, Wyoming had not provided an adequate regulatory framework to ensure conservation of a recovered wolf population into the foreseeable future (for more information, see our 12-month finding on Wyoming's petition to establish and delist the NRM gray wolf population (71 FR 43410; August 1, 2006) at *http://www.fws.gov/mountain-prairie/species/mammals/wolf/FR08012006.pdf* ). Therefore, in the preamble we indicated we would consider excluding the significant portion of the range of the NRM DPS occurring in Wyoming, outside Yellowstone National Park, John D. Rockefeller Jr. Memorial Parkway, and Grand Teton National Park (hereafter collectively referred to as National Parks) from the delisting. This alternative in the preamble also considered delisting the wolf on National Park Service lands and in those portions of Wyoming not determined to be a significant portion of the range. The exact boundaries are described in the proposed rule (72 FR 6119; February 8, 2007). A map can be found at *http://www.fws.gov/mountain-prairie/species/mammals/wolf/wyomingwolves2006.pdf* . However, the rule proposed to delist all of the NRM DPS if Wyoming adopted a State law and wolf management plan that the Service determined to be in compliance with the Act (72 FR 6138; February 8, 2007). New Information In February 2007, the Wyoming governor signed legislation (Wyoming House Bill 213) that proposes to revise Wyoming State statutes pertaining to wolf management. If this were to become effective, it would appear to allow for adequate wolf management by the Wyoming Game and Fish Department (WGFD). Furthermore, in May 2007, the Governor of Wyoming stated it was appropriate to analyze a revised wolf management plan that would maintain a recovered wolf population for the foreseeable future (Freudenthal 2007). This draft wolf management plan requires final State approval from the Wyoming Game and Fish Commission (Commission) and may require further legislative action so that certain recent changes in State law could become effective. The legislation contains a list of actions that are to occur for the law to become effective. These actions are summarized below and may be viewed in the House bill at *http://gf.state.wy.us/downloads/pdf/HB0213%202007%20Wolf%20Engrossed.pdf.*

(1)On or before February 29, 2008, the Service shall have published the final rule to delist the gray wolf in the entire State of Wyoming; and

(2)The Service has either published a final rule modifying the existing 2005 special regulation under section 10(j) of the Act or has executed an agreement with the State of Wyoming that provides adequate protection for Wyoming's wild ungulates; and

(3)All claims in the lawsuit brought by the State of Wyoming contesting the Service's actions finding Wyoming's statute and plan inadequate have been resolved or settled; and

(4)The governor of Wyoming shall certify to the Secretary of State of Wyoming that the actions described in the statute have occurred. The revised wolf management plan provides that the designation of wolves as a trophy game animal shall include any gray wolf within the boundaries that are now consistent with those the Service has deemed necessary for maintaining a recovered wolf population. For specific boundaries, see the House bill at the above website and the revised management plan. When effective, this law and wolf management plan would commit the State to maintain at least 15 breeding pairs in the northwestern portion of the State including the National Parks, with 7 of these breeding pairs occupying areas outside the National Parks. The State of Wyoming would ensure that Wyoming's wolf population, including wolves in National Parks, never drops below 10 breeding pairs and 100 wolves (WGFD 2007, p. 1). Furthermore, the plan now incorporates the Service's definition of a breeding pair as an adult male and female raising two or more pups-of-the-year until December 31 (WGFD 2007, pp. 1-3; 72 FR 6129, February 8, 2007). Under this law and plan, if the NRM DPS is delisted, Wyoming would designate the gray wolf as a trophy game animal in the area that conforms to our determination of the significant portion of the range in Wyoming (72 FR 6119; February 8, 2007). Outside this area in Wyoming, wolves would be classified as predatory animals (WGFD 2007, pp. 1, 2, 4, 5, 10). These designations would remain constant regardless of changes in the number of breeding pairs in the State. Since the State does not have the legal authority to manage wolves within the National Parks, its management emphasis would be applied to maintaining seven breeding pairs that primarily inhabit areas outside the National Parks (WGFD 2007, p. 10). Because the State also does not have any authority to manage wildlife occurring on the Wind River Reservation, the Tribes are not obligated under the State's wolf management plan to manage for a specific number of wolves. Any breeding pairs that might become established on the reservation would not reduce Wyoming's commitment to maintain at least seven breeding pairs outside the National Parks in northwestern Wyoming. WGFD will continue to coordinate with appropriate authorities on the Reservation for the purpose of developing mutually agreeable wolf management objectives (WGFD 2007, p. 10). The wolf trophy game area would be designated as the Northwest Wyoming Wolf Data Analysis Unit

(DAU)and would consist of three wolf management units (WMU). WGFD uses such an approach to manage all other species of big game and trophy game animals. The DAU is used to manage a population of animals, while WMUs are used to manage specific harvest objectives within the DAU. Wolves that occupy the DAU would be actively managed, and public take would be regulated under appropriate State statutes and Commission regulations at the WMU level to ensure that at least seven breeding pairs occupy this DAU (WGFD 2007, p. 10). The size of the DAU would allow for some flexibility where the minimum of seven breeding pairs would be maintained. In the event pack densities need to be reduced in one area to minimize wildlife or livestock conflicts, WGFD would manage for replacement breeding pairs in an area within the DAU that is more suitable for wolves (WGFD 2007, p. 11). Hunting and trapping regulations would be implemented through the same rulemaking processes used for other trophy game animals in Wyoming and would include public input. WGFD may use a variety of harvest regimes, including harvest quotas, to maintain at least seven breeding pairs of wolves outside the National Parks. Seasons would be closed when the mortality quota is reached, or if the Commission deems it necessary to limit take in additional areas that are designated for trophy game animal protection. The wolf management plan states that, as with mountain lions ( *Puma concolor* ) and black bears ( *Ursus americanus* ), license sales would not be restricted unless limited quota harvest regimes are necessary. We anticipate that a limited harvest quota would likely be necessary for WGFD to maintain at least seven breeding pairs outside the National Parks in northwestern Wyoming. Wolf mortality quotas would be based on desired pack densities for each WMU and total numbers of packs at the DAU level (WGFD 2007, p. 15). It is currently unlawful in Wyoming to take trophy game animals by trapping. However, if delisted, gray wolves classified as trophy game animals could be legally trapped as set forth by Wyoming Statute 23-2-303(d). In the event of delisting, WGFD would first need to adopt regulations setting forth the specifications for traps and snares used for the taking of gray wolves (WGFD 2007, p. 16). In recognition of the importance of sufficient dispersal and exchange of wolves in maintaining genetic variability, WGFD would not remove lone wolves dispersing through areas outside of the trophy game area unless conflicts with human activities arise. However, wolves in these areas may be subject to liberal public take regulations. Public education efforts would emphasize that lone wolf sightings do not necessarily mean a pack is forming in the area (WGFD 2007, p. 17). The wolf management plan emphasizes that interagency efforts to maintain linkage zones and movement corridors in the northern Rockies for grizzly bears ( *Ursus arctos horribilis* ), forest carnivores, and big game will also benefit wolves. WGFD commits, to the extent practicable, to ensure that genetic and connectivity issues do not threaten Wyoming's wolf population. Conservation measures could include, but would not be limited to, working with other States to promote natural dispersal into and within various portions of the Greater Yellowstone Area, and, if necessary, by relocation or translocation (WGFD 2007, p. 17). Under the new wolf management plan, WGFD would monitor the number of breeding pairs residing in Wyoming, regardless of legal classification, and document their distribution, reproduction, and mortality. WGFD would be responsible for monitoring these parameters in all occupied habitat outside of National Parks, the National Elk Refuge, and the Wind River Reservation. The National Park Service intends to continue to monitor wolves inside the National Parks, and the Service intends to monitor wolves on the National Elk Refuge. WGFD would coordinate and share monitoring data with these agencies, Montana, Idaho, and Tribes. WGFD would monitor wolves outside the DAU less intensively (WGFD 2007, p. 12). In conclusion, it appears the regulatory framework provided by the State statute and proposed revised wolf management plan, would if adopted, provide assurance that Wyoming's share of the tri-State NRM wolf population would be maintained above recovery levels into the foreseeable future and that a significant portion of the range in Wyoming would continue to be occupied by wolf packs. This type of management framework is consistent in its general principles with those already adopted and accepted as being adequate regulatory frameworks for delisting wolves in the States of Minnesota, Michigan, Wisconsin, Montana, and Idaho. The plan would provide adequate assurances that a viable wolf population would be maintained in the NRM DPS. However, if the statute does not go into effect or if the plan is not adopted by the Commission, our final rulemaking could employ the alternative described in the preamble to the February 18, 2007, proposed rule to keep wolves in the significant portion of their range (outside the National Parks) in Wyoming as a nonessential experimental population with continued protections under the Act. The February 8, 2007, proposed rule may be viewed at *http://www.fws.gov/mountain-prairie/species/mammals/wolf/NRM_wolf_DPS_%2002082007.pdf* . The revised draft Wyoming wolf management plan may be viewed at *http://gf.state.wy.us/wildlife/wildlife_management/wolf/index.asp* . In addition to having new information regarding State management of wolves in Wyoming, the Wind River Reservation recently submitted a wolf management plan to us for approval. Wolf management on Tribal lands within the NRM DPS will be beneficial, but is not necessary to either achieving or maintaining a recovered wolf population in the NRM (72 FR 6135; February 8, 2007). The Wind River Reservation occurs just outside the significant portion of the range in northwestern Wyoming and currently does not solely support any breeding pairs, although two adjacent packs range inside the reservation boundary (Shoshone and Arapahoe Tribal Fish and Game Department 2007, pp. 4-5). As such, the Shoshone and Arapahoe Tribal Fish and Game Department has prepared a wolf management plan for the reservation for our review. We have approved the Tribal plan because it is consistent with maintaining a recovered population of wolves in Wyoming after delisting and the guidelines of the 2005 10(j) rule (King 2007). Our approval of the plan provides the Shoshone and Arapahoe Tribal Fish and Game Department with the ability to manage listed wolves according to provisions for controlling problem wolves in our 2005 special regulation under section 10(j) of the Act (70 FR 1286, January 6, 2005). If the wolf is delisted, the Shoshone and Arapahoe Tribal Fish and Game Department would designate it as a game animal and would establish hunting and trapping seasons (Shoshone and Arapahoe Tribal Fish and Game Department 2007, p. 9). The Shoshone and Arapahoe Tribal Fish and Game Department would not manage for a specific number of breeding pairs (Shoshone and Arapahoe Tribal Fish and Game Department 2007, p. 9), because the Wind River Reservation is not considered essential to maintaining a recovered wolf population in Wyoming. Any wolves that establish themselves on the reservation would be in addition to those managed by the State of Wyoming for maintaining a recovered population. The Wind River Reservation plan may be viewed at: *http://www.fws.gov/mountain-prairie/species/mammals/wolf/Wind_River_Res_Wolf_Plan_20070413.pdf* . Public Hearing and Comments We intend that any final action resulting from the proposal will be as accurate and as effective as possible. Therefore, we solicit comments or suggestions from the public, concerned governmental agencies, the scientific community, industry, or any other interested party concerning the proposed rule. Specifically, we seek information, data, and comments concerning the proposed delisting of all of the NRM DPS throughout Wyoming considering the adequacy of Wyoming's regulatory framework as represented by its revised State law, if adopted, and State and Tribal wolf management plans. If you previously submitted comments on the delisting proposal, please do not resubmit them, as we have already incorporated them into the public record and will fully consider them in our final decision. However, we welcome any new comments pertaining to the proposed delisting throughout Wyoming in light of the new regulatory framework. You may submit comments as indicated under ADDRESSES. If you wish to submit comments by e-mail, please submit them in ASCII file format and avoid the use of special characters and any form of encryption. Due to the high level of interest in this rulemaking process, we may post comments on our Web site. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Comments and other information received, as well as supporting information used to write the proposed rule, will be available for public inspection, by appointment, during normal business hours at the Helena, Montana Field Office (see ADDRESSES ). In making a final decision on the proposal, we will take into consideration the comments and any additional information we receive. Such communications may lead to a final regulation that differs from the proposal. Anyone wishing to make an oral statement at the public hearing for the record is encouraged to provide a written copy of their statement to us at the hearing. In the event there is a large attendance, the time allotted for oral statements may be limited. Speakers can sign up only at the open houses and hearings. Oral and written statements receive equal consideration. There are no limits on the length of written comments submitted to us. If you have any questions concerning the public hearing or need reasonable accommodations to attend and participate in the public hearing, please contact Sharon Rose at

(303)236-4580 as soon as possible, but no later than 1 week to before the hearing date, to allow sufficient time to process requests. Information regarding the proposal is available in alternative formats upon request. Authority The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 *et seq.* ). Dated: June 28, 2007. Kevin Adams, Acting Director, U.S. Fish and Wildlife Service. [FR Doc. 07-3273 Filed 7-2-07; 8:45 am]

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